Sainsbury’s sales slow despite Euro 2024 boost; eurozone inflation expected to slow – business live | Currencies

At first glance, it’s a bit tough to work out what sort of results have landed in Sainsbury’s bagging area. Ultimately, the reduction in the rate of growth was partly to be expected, especially in grocery.

As inflation cools, the weather worsens and tough comparisons crop up on the course, eking out the amount of growth seen last year was always a difficult ask. But there is a lingering Sainsbury’s specific issue in its ownership of Argos. Electronics aren’t faring well in this economic climate, as people prioritise the essentials. General merchandise is the most cyclical area of the supermarket economy to be in, so being overweight in this arena really slows you down when times get tough. The additional exposure offsets and hides what has been a remarkable showing for the core grocery business.

Sainsbury’s was having a bit of an identity crisis, straddling the more vulnerable middle-line between premium and value. An awful lot of work has gone into improving products, value perception and innovation more generally, giving the group enough gusto to start moving market share in the right direction. AI ambitions to improve real-time customer service and experience are grand but a bit thin on detail, so an area to watch.

Investors are also being rewarded for their patience, with at least £250m making its way back to them once the sale of Sainsbury’s Bank assets to NatWest has completed.

Overall, Sainsbury’s has done just about all it can to better itself and it should be commended for that, but the Argos albatross around its neck can’t be ignored.