UK: Sainsbury’s growth maintains pressure on rival Tesco
- Credit: PA
Supermarket chain Sainsbury’s kept up the pressure on faltering rival Tesco today as it extended its run of sales growth to a 34th quarter in a row.
The chain said it continued to grow market share after like-for-like sales rose 0.8%, excluding petrol forecourt operations,in the 12 weeks to June 8.
This was slower than the 3.6% rise in the final quarter of the previous financial year and below some City forecasts, although Sainsbury’s pointed out it was up against strong comparisons with last year’s Jubilee celebrations.
Chief executive Justin King said: “This has been a solid performance in what continues to be a tough consumer environment.”
The performance comes a week after Tesco reported a sales fall of 1% in its first quarter, raising fears that its recovery plans have stalled.
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Sainsbury’s has prospered with its “Live Well for Less” offer to hard-pressed households squeezed by falling real wages.
Convenience store sales are growing by nearly 20% on a year-on-year basis, fuelling speculation in the City that the company’s core superstore estate has seen a decline in underlying sales.
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Over the quarter the company opened 19 smaller stores, refurbished a further 13 and is on track to deliver around two new stores per week over the year.
Latest retail figures from Kantar Worldpanel show it was the only one of the four large supermarkets to gain market share - with the others being squeezed by the likes of Waitrose and Aldi at opposite ends of the market.
Sainsbury’s run of quarterly growth dates back to 2005 amid a turnaround in fortunes since the arrival of Mr King a year earlier.
Last month he committed his future to the grocer after reports suggested he was set to leave to become boss of Formula One motor racing. Profits in the company’s last financial year rose by 6% to £756million.
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said “Sainsbury has maintained its slow but steady progress, which in itself means that it has trumped most of its rivals.
“The very fact that the period represents the 34th consecutive quarter of growth is a testament to the company’s resilience during what has been a difficult economic time.”