Sales of Sainsbury’s fashion brand Tu grew by 8.5% in the 52 weeks to March 12, and it is now the UK’s sixth largest clothing retailer by volume and tenth largest by value.
The supermarket revealed today that it made a statutory full-year pre-tax profit of £548m, following a £72m loss the year before. Its underlying pre-tax profit was down 13.8% to £587m.
Like-for-like sales fell 0.9% across the business during the period. Retail sales excluding fuel were up 0.4% year on year, while underlying group sales excluding fuel fell 1.1% to £25.8bn.
Sainsbury’s said it had seen “strong growth” in its clothing and general merchandise businesses this year, both in stores and online.
“Clothing is a great growth story for us,” said chief executive Mike Coupe on Radio 4’s Today programme this morning. “Sales have grown by almost 9% this year. We talk about high street style at supermarket prices and that is why our business has grown this year.”
Its strategy for growth is focused on increasing non-food ranges in stores and growing Tu’s online sales.
Sainsbury’s launched Tu online nationwide in August 2015. It said this channel is “proving popular”, with the majority of customers collecting their orders from more than 700 in-store collection points.
Coupe said around 70% of Tu’s online sales are collected in our shops, which is part of the reason for its proposal to acquire Home Retail Group, owner of Argos.
“By acquiring Argos customers can buy well over 50,000 products from more than 2,000 stores within two hours. We think that is pretty compelling.”