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Sainsbury’s outperforms Tesco in Q1


Sainsbury’s has today reported a 1.9 per cent year-on-year increase in like-for-like (LFL) sales for the first quarter of its financial year, with trading growth for the three-month period two per cent ahead of the UK’s market leading grocer Tesco.

Britain’s third largest supermarket group saw weekly transactions rise five per cent to 22 million in the 12 weeks to June 11th 2011, with sales of general merchandise products and clothing growing at a faster pace than food sales.

LFLs at Sainsbury’s in Q1, including petrol, were up 4.8 per cent, and like Tesco’s trading statement yesterday rising fuel costs were cited as a major reason for a solid rather than spectacular performance.

Although Tesco saw LFL sales fall 0.1 per cent year-on-year in its first quarter there were a number of similarities between the two grocers’ announcements, with own-brand goods faring well at both firms and plans announced for click & collect services to be further rolled out by each of the companies.

Justin King, CEO of Sainsbury’s, said: “We’ve delivered a solid sales performance, in line with our expectations, in spite of the continued tough consumer environment.

“Fuel price inflation combined with strong fuel volume growth resulted in an increase in total sales of 7.3 per cent, with like-for-like sales up 4.8 per cent.”

It has been a good week for King, who received a CBE for his services to retailing in the Queen’s birthday honours on Saturday, and with hundreds more store openings planned for the next three years there is plenty of potential for the company to increase its market share further in the foreseeable future.

Anna Smee, a business strategist at consultancy firm Hundred Consulting, said: “Unlike some of its competitors, there is a real sense of energy and purpose about Sainsbury’s and it has the added advantage that the UK is its sole point of focus.

“It is innovating its way through these challenging times and refusing to bow its head.”

Some of innovative concepts unveiled by the grocer during recent months include ‘drive-thru’ shopping in Manchester, giant out-of-hours vending machines and the Fresh Kitchen outlet in London’s Strand, which offers customers takeaway lunches.

Smee added: “Profits have been further boosted by the opening of new stores around the country, many of them under the Sainsbury’s Local brand, which benefits from higher pricing on convenience products than the larger outlets.”

Published on Wednesday 15 June by Editorial Assistant

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