Sainsbury’s makes Tu “more profitable and resilient” with simplified ecommerce

Sainsbury’s has published its preliminary results for the 52 weeks ended 4 March 2023, revealing retail sales were up 5.2%.

The national supermarket chain has made "bold choices to reduce costs, [making] Argos and Tu more profitable and resilient".

Tu is now the sixth-largest UK clothing brand by volume. Full-price Tu sales make up 80% Sainsbury’s clothing sales, up 15% versus pre-pandemic. It has also extended its range of third-party clothing brands, including Sosandar, Little Mistress and Finery, to offer more choice and convenience to shoppers.

Sainsbury’s migrated Tu clothing's ecommerce onto the Argos platform, improving the quality of the web experience and enabling customers to use their Nectar points for purchases, helping them save money. This integration is also saving the business money and driving greater simplicity. Online sales were up 46% compared to pre-pandemic numbers.

Overall, the company reported an underlying profit before tax (UPBT) of £690 million, down 5% and at the top end of £630 million to £690 million guidance range. It was up 18% versus 2019/20 pre-pandemic profits of £586 million.

Moving forward, Sainsbury’s expects UPBT to sit between £640 million and £700 million for the fiscal year 2023. The company expects to generate at least £500 million of retail free cash flow.

Simon Roberts, Chief Executive of Sainsbury's, said: "We really get how tough life is for so many households right now which is why we are absolutely determined to battle inflation for our customers. Our focus on value has never been greater and we have spent over £560 million keeping our prices low over the last two years. As a result, we are now the best value compared to our competitors that we have been in many years and we are delivering improved market share performance in Sainsbury’s.

"We have improved the performance and profitability of Argos, Tu, Nectar and Financial Services so that we can invest further in the areas that customers and colleagues care about most."

Earlier this year, Sainsbury's announced an agreement to stock womenswear brand Sosandar across its online platform and a select number of retail locations. Through this wholesale agreement, a selected range will begin to be sold through Sainsbury's during 2023, initially online only with selected stores planned later in 2023.