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Justin King upbeat on latest figures

Sainsbury’s first quarter trading statement for the 12 weeks to 9th June 2012 shows total sales up 3.6 per cent (3.8 per cent excluding fuel).

CITY & CORPORATE

Justin King upbeat on latest figures

Justin King, Chief Executive, said, "We have delivered good sales growth in the quarter, in line with our expectations, helping our customers to manage both their weekly budgets, and to celebrate special occasions. Over the quarter we maintained our outperformance of the market with 1.4 per cent like-for-like growth.

Customers continued the habit of savvy shopping to save money in order to be able to treat themselves on special occasions, shown by strong sales in the lead up to the Jubilee celebrations. Just as in 2011, the quarter was characterised by five bank holidays, a royal event and periods of unseasonal weather. Consistent performance year-on-year puts our two year like-for-like sales growth at 3.3 per cent.
Our own label ranges are leading the way in helping customers to Live Well for Less, with the relaunch of by Sainsbury's now 75 per cent complete. Over 70 per cent of these products are completely new or redeveloped.

We are gaining market share in our core general merchandise and clothing categories. Non-food continues to grow faster than food, and the quarter saw the strongest ever sales week on clothing. In particular, the fourth collection of our Gok for TU womenswear looks set to be our most successful to date.

Our convenience stores continue to be a strong driver for growth for the business, achieving year-on-year sales growth of 16 per cent. Our online business grew by over 20 per cent, with an improved website enabling customers to order easily from handheld devices while on the move.
 
We grew space in line with our plans, adding 63,000 sq ft of gross space to our estate through the opening of 21 convenience stores and one extension. We also refurbished eight stores over the quarter.
Looking forward, we expect the market to remain competitive. Universal appeal, supported by market leading own label ranges, Brand Match and loyalty insight, ensures we help our customers to Live Well for Less. We remain well placed to continue to outperform the market."

Jon Copestake, retail analyst at the Economist Intelligence Unit commented,"In this spell of consumer austerity Sainsbury’s 1.4% rise in like-for-like sales has been flattered by spending related to the Jubilee, a boost that Tesco was unable to include in its results on Monday. Nonetheless, it is interesting to note that convenience stores logged a 16% rise and that online also grew by 20%. Both channels are expected to lead retail growth in the UK as impulse purchases from local stores and larger online shops take up a greater proportion of spending. In this respect, it seems that Sainsbury’s has a channel mix that is well placed to benefit from evolving consumer shopping habits."

Jo Causon, Chief Executive of the Institute of Customer Service comments:“The UK retail sector is highly competitive and many supermarkets are struggling to compete in the wake of aggressive price wars and lacklustre consumer confidence.

“Yet, Sainsburys appears to have understood what today’s consumer wants - a positive overall experience as well as value for money.Although no doubt helped by the recent bank holidays and price match offers, Sainsburys has benefitted from its direct focus on the British market, its consumers and what they want from a shopping experience.

“In those areas where Sainsburys has focused directly on customer needs - by building smaller convenience stores and boosting their online and mobile offering - it is achieving positive financial results.

“This Institute’s most recent UK Customer Satisfaction Index (UKCSI) report shows a direct correlation between those supermarkets scoring highly in terms of customer satisfaction and those with the highest market share. While cost will always be a factor, customer service will remain the last bastion of differentiation for businesses, as Sainsburys’ latest sales figures demonstrate.”

Do not miss the Retail Bulletin's InStore Engagement Conference JUly 10th 2012. Click here for full details.

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