Trading at leading supermarket chain Sainsbury’s continued to improve during its fourth quarter, it was revealed today, but at a slower pace due to a “tough consumer environment”.
Total sales excluding fuel increased 3.5 per cent and just one per cent on a like-for-like (LFL) basis for the ten weeks to March 19th, compared to the same period last year.
LFL sales for the full-year were 2.3 per cent higher than the previous 12 months and gross space rose 8.5 per cent in the year following an aggressive store opening programme.
Justin King, CEO of Sainsbury’s, commented: “In a tough consumer environment our focus on delivering universal customer appeal and our multichannel and space growth strategy has attracted a record 21 million customers to our stores each week, up one million on last year.
“Total sales growth including fuel was 6.8 per cent, reflecting volume growth in fuel as customers respond to our competitive prices.
“This is despite fuel price inflation of 16 per cent year-on-year, which is having a significant impact on most household budgets.”
Q3 LFL sales, which included a tough Christmas period for many retailers, were up a healthy 5.4 per cent, and so the fall in sales growth this quarter for a grocer that is actually increasing its market share demonstrates the current difficulties for the retail industry.
Sainsbury’s was one of the rare retail winners of the Christmas period but like fellow high-flier John Lewis has found consumer spending much reduced in the new year.
In better news, Sainsbury’s non-food sales grew at three times the rate of food during Q4 and online grocery sales jumped 20 per cent year-on-year.
Also some huge store openings, including its biggest stores in England, Wales and Scotland unveiled this year, helped the supermarket beat its two-year growth targets.
In 2009 the retailer aimed to increase its store space by 15 per cent over the following 24 months and since then it has increased its gross space growth by 15.9 per cent.
King continued: “We expect the consumer environment to remain tough, with our customers facing fuel price inflation, uncertain employment prospects and government spending cuts.
“We have demonstrated our ability to perform well in these conditions and are confident that our growth plans and universal customer appeal, supported by Nectar and coupon at till, mean we are well-positioned for further growth in 2011/12.”