Sainsbury’s CEO Simon Roberts has issued a cautious stance on future recruitment amid mounting wage pressures, despite the supermarket giant celebrating its most successful Christmas trading period to date.
The UK’s second-largest supermarket chain reported a robust 3.8% increase in like-for-like sales during the six weeks leading to 4 January. The impressive performance was primarily driven by strong grocery sales, though Argos experienced slower growth.
Roberts expressed significant concerns regarding the unprecedented speed of national insurance changes facing the industry, highlighting that the October budget implications could cost Sainsbury’s £140 million from April. The supermarket’s shares declined 3.34% to 254p, reflecting broader market anxieties within the retail sector.
The retail giant has announced a 5% wage increase for hourly-paid workers, equating to over £1,100 annually per employee. This increase will be implemented in two stages, March and August, to manage inflationary pressures effectively.
Premium product lines performed exceptionally well during the festive period, with the Taste the Difference range achieving 16% sales growth. Party food sales surged by nearly 40%, while champagne sales peaked at 200 bottles per minute during the pre-Christmas rush.
While Argos witnessed a modest 1.1% sales increase over the Christmas period, its performance declined by 1.4% across the quarter. The clothing division maintained growth at 2.2%, though this marked a significant deceleration from the previous quarter’s 8.3% expansion.
Roberts noted a distinctive shift in shopping patterns, with customers making their Christmas purchases later than ever before. The supermarket’s strategic focus on premium ranges and competitive pricing appears to have resonated with cost-conscious consumers seeking value during the festive season.
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