London, Jan 9, 2026, 10:49 GMT — Regular session
Shares in J Sainsbury SBRY.L slid on Friday after the grocer’s Christmas trading update showed a drag from its Argos unit. The stock was down 6.3% at 308.4 pence by 1025 GMT.
The numbers land in a crowded week for UK retail, with investors trying to pin down what shoppers did with their money over the holiday peak — and what it cost retailers to win those sales. Rival Tesco’s update a day earlier knocked its shares and kept the sector sensitive to any hint that promotions are biting.
Sainsbury said total retail sales excluding fuel rose 3.9% in the 16 weeks to Jan. 3, while like-for-like sales — a measure that strips out new space and other distortions — rose 3.4%. Grocery sales grew 5.4%, but Argos sales fell 1.0% and general merchandise and clothing slipped 1.1%.
The group kept its forecast for retail underlying operating profit — a profit measure that excludes some one-off items — of more than 1 billion pounds for the year. It raised its retail free cash flow view to more than 550 million pounds and reiterated plans to return more than 800 million pounds of cash to shareholders, including a 250 million pound special dividend and a 250 million pound share buyback.
Investors focused on Argos, which tends to move more with big-ticket demand than a supermarket aisle does. “Keep in mind that Sainsbury’s is more exposed to general merchandise than its peers, owing to its ownership of Argos,” said Aarin Chiekrie, an equity analyst at Hargreaves Lansdown. City AM
Chief executive Simon Roberts also pointed to easing price pressure in the food shop, saying: “We’ve seen food inflation come down … we’d expect that to continue.” Industry data showed UK grocery inflation eased to 4.3% in the four weeks to Dec. 28 from 4.7% in the prior four-week period, while Britain’s main minimum wage rate rises 4.1% in April. Reuters
Company-compiled analyst forecasts published in December put retail underlying operating profit at 1.052 billion pounds for 2025/26. That sort of bar leaves the market quick to punish any wobble in higher-margin areas such as general merchandise.
But the fourth quarter still carries the risk. If discounting ramps again, or demand for higher-ticket items stays weak, it could squeeze margin even with food volumes holding up.
The next hard marker is Sainsbury’s preliminary results on April 23, when investors will look for detail on Q4 trading and how much of the planned cash return actually lands.
