Sainsbury’s boss Mike Coupe has played down fears of a shopper spending slowdown this Christmas, but admitted the golden quarter will be “difficult to predict”.
Fragile consumer confidence in the wake of Brexit uncertainty, the onset of food price inflation, sluggish wage growth and last week’s hike in the base interest rate have combined to create a perfect storm for shoppers.
And the latest BRC-KPMG Retail Sales Monitor only served to heighten concerns that customers could tighten their belts over the key Christmas trading period.
Non-food sales tumbled at the steepest rate on record in October, plummeting 2.1% year-on-year, while overall retail sales fell 1% on a like-for-like basis.
But Coupe insisted that while shoppers “are very value conscious” amid the turbulent political and macroeconomic climate, “customers will put their hands in their pockets” during the golden quarter.
Speaking after Sainsbury’s posted a 40.8% slump in statutory pre-tax profit to £220m in its first half, Coupe said: “It’s difficult to predict exactly how Christmas plays out. The only thing we can say with confidence is that it will come.
“Customer shopping habits inevitably change over the season, but nevertheless we are confident in our Christmas offer”
“Customer shopping habits inevitably change over the season, but nevertheless we are confident in our Christmas offer.”
Pressed by Retail Week on how Black Friday and Christmas would play out across the sector, Coupe added: “We have this conversation every year.
“Christmas will come, sometimes it comes in a slightly different shape to what you might have expected, and I suspect it will all kick off in a couple of weeks’ time with the onset of Black Friday.
“One way or another, all of my experience says that customers will treat themselves and will seek to have a great Christmas as they do every year.”
Argos was one of the first big retailers to kick-start the hotly-contested battle for festive spend when it launched its Christmas advert last Friday.
Sainsbury’s will unveil its campaign next week, following Remembrance Sunday.