Sainsbury's records growth in trade

Jun 18 2008

Supermarket chain Sainsbury’s said today that its promotional offers had paid off, with a 3.4% rise in first quarter sales.

Britain’s third biggest supermarket put faith in its “universal appeal” to suit customers on all budgets amid challenging economic conditions.

The 3.4% hike in like-for-like sales, excluding petrol, for the 12 weeks to June 14 shows a slowdown in trade on the 4.1% seen the previous quarter. However the figure is broadly in line with City expectations.

Sainsbury’s said it saw no let-up in the tough trading environment, but was sticking by its expectations for full-year results.

Soaring fuel prices saw like-for-like sales including petrol rise by 7.3% in the first quarter, up from the 4.4% seen in the same quarter last year.

Sainsbury’s first quarter sales growth was roughly in line with the 3.5% reported by larger rival Tesco earlier this month, but falls short of the 7% increase posted by the UK’s number four supermarket chain, Morrisons.

Sainsbury’s chief executive Justin King said today’s figures were in line with expectations and came against strong comparatives last year, when first quarter sales rose 5.1%.

He said: “The challenging economic environment continued throughout the quarter. However, we are now serving nearly 18 million customers a week and have delivered sales growth in line with our expectations.

“Whilst we anticipate that the environment will remain challenging, we operate from a strong financial position and our expectations for the full year remain unchanged.”

Discounting is becoming key in the supermarket sector as stores seek to lure in consumers hit by rocketing petrol costs, energy and food bills.

Last month Tesco revealed it had put an extra 1,000 products on promotion, while Sainsbury’s said the proportion of goods on special offer was 10% up year on year.

Sainsbury’s said today that it was leading its “Feed your family for a fiver” campaign to appeal to cost-conscious consumers.

It added that its non-food operation was growing “strongly” and said online sales were up more than 40%.