Major supermarket group Sainsbury’s has outperformed it major rivals in the grocery sector in recent months, demonstrated by the 4.6 per cent rise in fourth quarter total sales reported today.
Like-for-like (LFL) sales, excluding fuel, rose 2.6 per cent year-on-year in the ten weeks to March 17th 2012, and the grocer claims that its convenience, online and non-food divisions are all growing ahead of the market.
Full-year LFLs are up 2.1 per cent, or 4.5 per cent if fuel sales are included, representing an impressive performance by the company during a difficult 12 months for the retail sector.
CEO of Sainsbury’s Justin King pointed towards the company’s investment in own label products, its Brand Match promotion & Nectar loyalty scheme, and its strong online offering as reasons that it was able to produce a “good performance in for the year against a challenging backdrop”.
“Our strategy of delivering universal customer appeal is succeeding in the current economic climate,” King continued.
Tesco, the market leader in UK grocery, A3366|has seen sales slip of late] and the second largest retailer in the sector Asda posted a mere one per cent rise in LFLs for its last quarter period.
Earlier this month it was revealed that Sainsbury’s had become the fastest growing online food retailer and was now second only to Tesco in terms of internet grocery orders in the UK.
Simon Chinn, Lead Consultant at retail analyst group Conlumino, called today’s results “positive” and argued that the £85 million invested by Sainsbury’s in its food offering was in tune with the “current customer mindset”.
“In many ways, Sainsbury’s is succeeding where Tesco is failing: namely through offering good prices without sacrificing its quality credentials,” Chinn said.
“Inevitably, Sainsbury’s has been a beneficiary of Tesco’s current problems and we think it is well placed to make further market share gains over the next six months.”
During the full-year Sainsbury’s achieved its target of growing its store space by 7.3 per cent, with over 170,000 sq ft of new gross space added in the fourth quarter, including two new supermarkets, three extensions to existing outlets and 15 new convenience stores.
Looking toward the next 12 months King commented: “The economic climate is likely to remain challenging, and we are committed to helping customers make their money go as far as possible.
“Nonetheless, the Diamond Jubilee, Olympics and Paralympics are wonderful opportunities this year for the country to join together and celebrate, and we expect these to underpin our continued growth as customers trust Sainsbury’s to make their celebrations really special.”