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Sainsbury's profits boosted by Christmas trading

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J Sainsbury

Earlier this week industry figures revealed that food like-for-like sales grew by 2.6pc during December, while non-food like-for-like sales dropped by 1.9pc.

Mr Coupe added: "General merchandise and clothing grew market share in a challenging market".

Sainsbury's now expects pre-tax profits to be slightly higher than the previous estimate of £559m, helped by higher cost savings from its takeover of Argos.

As a outcome underlying pretax profit for the full 2017-18 year would be moderately ahead of the published analysts' consensus - an underlying pretax profit of 559 million pounds ($755.77 million), down from 581 million in 2016-17.

Sainsbury's has upgraded its full-year profit forecast following a record Christmas, but the supermarket giant warned of a challenging market amid weaker sales at Argos.

Total grocery sales growth was ahead of that of Q2 (1.4%), however marginally behind that of Q1 (3.0%).

Argos' parent company Home Retail Group was acquired by Sainsbury's in September 2016
Image Sainsbury's bought Argos in 2016

Laith Khalaf, senior analyst Hargreaves Lansdown, said: "Sainsbury's put in a solid performance in the last quarter of the year, despite its exposure to the fast-shrinking general merchandise market. We had a strong Christmas week, with record sales, over 340,000 online grocery orders and stellar growth in Argos Fast Track delivery and collection", said chief executive Mike Coupe.

The second largest United Kingdom grocer reported an increase in like-for-like sales of 1.1 percent during its third quarter, which includes the Christmas period.

He made the prediction as Sainsbury's reported rising food sales in the last three months, including over Christmas.

He added: "We delivered an excellent operational performance across the group, with great availability, strong customer satisfaction scores and our lowest level of waste ever at Christmas".

The relative performances highlight the scale of the challenge for traditional supermarkets, which all lost market share over Christmas while Lidl and Aldi increased theirs. "Customers bought more Taste the Difference food than past year as people treated themselves and our popular 25p veg lines helped our customers live well for less".

Argos, which Sainsbury's agreed to buy in 2016, saw record sales over the Black Friday period.

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