Sainsbury's festive performance was anything but

The supermarket chain has reinforced the impression that the core business is struggling with bosses focussed on pushing through controversial plans to merge with Asda

An Argos concession at Sainsbury's: General merchandise performed poorly for the business during the festive season (Image from Sainsbury's Media Pack, includes permission to publish )

There wasn’t much festivity at Sainsbury’s over the festive season. Its seasonal trading update rather cemented its status as the supermarket sector’s current problem child.

CEO Mike Coupe said Christmas came late for the grocer. Critics immediately questioned whether it came at all.

Sales for the 15 weeks to January 5 fell by 1.1 per cent excluding fuel, driven by a 2.3 per cent decline in general merchandise, for which read clothes and the stuff that Argos sells.

Food did better, but a 0.4 per cent increase is hardly anything to shout about.

The chain is still seeing action at its convenience stores (up 3 per cent) and online (twice that).

But those numbers only serve to underline how poorly its big supermarkets are faring.

Worryingly, the grocer is beginning to establish a reputation for foul ups.

Online, customers have complained about empty shelves at some of the stores. Then there was the PR debacle of the recently launched ‘wellness’ hubs. The reception was less than positive, not least when high profile commentators spotted sugary cereal bars that were, mistakenly we were told, included in the range.

Isolated incidents? Perhaps. But too many of them and you start to develop a decidedly unhealthy narrative.

As for that general merchandise, Argos has on occasion showed itself to be one of the better arrows in Coupe’s bow, but Sainsbury’s decided it would go easy on Black Friday discounting with entirely predictable results.

The only consolation? It could have been a lot worse. Asos, the online clothes retailer, chose the same course and ended up having to issue an ugly profit warning. Retailers not named Amazon must wish they could send the event back to the US from whence it came. They should be so lucky.

Yet again Coupe’s Sainsbury’s has given the distinct impression that it is drifting, with its executives focused on driving through the controversial planned merger with Asda at the expense of the core business. The latter has also had its troubles but recently it has been showing signs of life and is starting to look like Sainsbury’s saviour.

Unfortunately, the deal is in the gift of the Competition Commission, the same Competition Commission that Sainsbury’s took to a judicial review because, despite having had months to work on its submissions, it wanted still more time.

Way to go about winning friends and influencing the people that count.

The Commission wouldn’t lack for political support if it did bring the hammer done on the deal. If it did force, shall we call it a Saixit, the business would be left scrambling for answers and wondering what’s next. Sound familiar?