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The boss of Sainsbury’s has called for interest rate cuts to boost consumer spending as strong supermarket sales were hit by problems at Argos.
Simon Roberts said that “customers remain cautious.”
He added: “Until we see sequential interest rate cuts, hopefully as soon as possible, consumer caution will continue on those more discretionary items.”
Shoppers’ hesitancy to spend on non-essential items contributed to a 6.2% drop in sales at Argos in the 16 weeks to June 22 compared with last year.
There are hopes of an interest rate cut this summer.
Shoppers’ reluctance to spend on non-essential items contributed to a 6.2 per cent drop in sales at Argos in the 16 weeks to June 22 compared with last year.
Sainsbury’s, Britain’s second-biggest supermarket, also blamed an “unseasonal start to summer” that deterred Britons from buying products from its home, garden and outdoor furniture departments.
But when the sun came out last week, he sold more fans than he had all year.
Argos has been an area of concern for some time, recording a 4.7 percent drop in sales in the previous quarter.
Sophie Lund-Yates, an analyst at Hargreaves Lansdown, described it as “an albatross around[Sainsbury’s]neck” that “cannot be ignored”.
Its disappointing sales contrasted with a 4.8 percent rise in grocery sales as Roberts said its food division was “going from strength to strength.”
This helped total comparable sales, excluding fuel, rise 3 percent.
It has been gaining market share for 15 consecutive months and now holds 15.2% of the sector, placing it second behind Tesco.
Speaking days before the election, Roberts took the opportunity to call on the next administration to reform corporate taxes, saying it is “absolutely essential to the growth of our economy.”
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