Grocery sales at Sainsbury’s increased by 9.3% in the 16 weeks to 6 January 2024, with Christmas grocery sales also jumping by 8.6% year-on-year.

The supermarket retailer pointed to stronger volume growth which offset lower inflation.

Sainsbury’s saw like-for-like sales, excluding fuel, increase by 7.4%, as it hit record sales in the run-up to Christmas for pigs in blankets, mince pies and sparkling wine. Taste The Difference sales also increased by 13% in Q3, as "customers treated themselves at home".

Furthermore, Sainsbury’s said that customers continued to “recognise the consistent improvement” of its value offer, with prices improving once again versus competitors through the quarter, supported by Nectar points on more than 6,000 products.

It has also stated that it has expanded its Aldi price match in January, with savings to be made on more than 550 essential everyday products.

Chief executive at J Sainsbury, Simon Roberts, said: "We've worked hard to really deliver for our customers this quarter and have grown grocery volumes ahead of the market for the fourth Christmas in a row. More customers are choosing to shop at Sainsbury's, recognising our determined focus on value, product innovation and service.

"This was our first Christmas powered by Nectar Prices, helping customers save an average of £16 on an £80 Christmas shop. We delivered our best ever value Christmas roast and customers bought record numbers of pigs in blankets, mince pies and sparkling wine. Taste the Difference sales grew ahead of the market as families treated themselves.

"Across the quarter, Argos performed ahead of competitors in a highly promotional market. Argos delivered a strong Black Friday performance but a weaker Christmas against an exceptional performance last year."

However, the supermarket chain did see a drop in clothing and general merchandise sales of -1.7% and -0.6% respectively.

Argos also saw a decline in sales of -0.9% in the 16 weeks to 6 January, although these results were compared to an "exceptionally strong performance last year".

Sainsbury's said that it expects underlying profit before tax in the current financial year of between £670m and £700, with a “strong grocery performance offsetting weaker general merchandise and financial services contributions.

It also expects to generate a retail free cash flow of at least £600m in the same period.

Investment director at AJ Bell, Russ Mould, added: "Non-food sales were very disappointing, implying that Sainsbury’s is either leaving areas like clothing and Argos’ general merchandise offering to wither away or it simply isn’t pushing the products that people want.

"Sainsbury’s partially blames tough comparative figures from the previous year, yet it does feel as if Argos, in particular, has been bumped down the list of priorities for the group since Simon Roberts took over as chief executive. One has to question if the Argos brand is still the right fit for the grocery seller over the long-term. If food is the priority, would the shop floor space currently occupied by Argos concessions be put to better use?

"Despite the negative issues, the core food offering is doing well as illustrated by grocery volumes growing ahead of the market for the fourth Christmas in a row. Sainsbury’s used to sit in a difficult position – too expensive for people with limited resources and not attractive enough versus Waitrose for wealthier individuals. Prices have since been cut and its Taste the Difference ‘posher’ range is now having broader appeal."

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