Sainsbury’s to raise wages as Taste the Difference range leads retailer to record Christmas

Sainsbury’s plans to increase staff salaries after strong demand for Taste the Difference products helped the retailer achieve record Christmas sales.

The supermarket giant said its staff would receive a 5 per cent pay rise over the next year, split into two separate increases to help “navigate a challenging cost environment”.

Both Sainsbury’s and Argos employees will see their hourly wages rise to £12.45 in March and £13.70 for those in London, before rising to £12.60 in August and £13.85 for employees of the capital.

This follows a 3.7 per cent festive rise in turnover for the six weeks to January 4, including a 16 per cent rise in revenue across its Taste the Difference range.

Food sales soared by almost 40 per cent, while more than 200 bottles of champagne were bought every minute in the “key days” before Christmas, Sainsbury’s said.

Demand for the FTSE 100 company’s general merchandise and clothing expanded by 3.4 per cent, outperforming the market and all its grocery rivals.

Simon Roberts, chief executive of Sainsbury’s, said the company enjoyed growing market share for the fifth consecutive festive season, as well as its seventh consecutive quarter of market-beating volume growth.

He added: “The strength of our customer service and operational performance set us apart as we celebrated the biggest Christmas in our history.”

“Customers bought later than ever and we achieved our highest sales in the last few days before Christmas.”

The excellent festive performance helped Sainsbury’s like-for-like revenue rise 2.8 per cent during the third quarter.

However, clothing and general merchandise orders were virtually flat due to the grocer’s increased focus on full-price seasonal sales and prioritizing more store space to sell food.

This follows industry data released earlier in the week which showed non-food sales across the retail sector fell 1.5 per cent in the final quarter of the year.

Argos sales fell 1.4 per cent due to lower demand for toys and higher-priced items, including furniture and larger consumer electronics.

This came despite a quarter of people in the UK visiting the retailer’s website over the Black Friday weekend, which Sainsbury’s said was a “significant increase” on the previous year.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: ‘Sainsbury’s is more exposed to general merchandise than its peers due to its ownership of Argos.

“General merchandise is the most cyclical area of ​​the supermarket economy, so being overweight in this area really holds you back when times get tough.”

However, Sainsbury’s expects its full-year underlying retail operating profits to be at the “midpoint” of its guidance range of £1.01bn to £1.06bn.

The company has also raised the underlying operating profit outlook for its financial services division to £30 million, compared with a previous estimate of between £15 million and £25 million.

sainsbury shares They were down 2.4 per cent to 257 pence on Friday morning, although they are still down around 11 per cent over the past year.