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Sainsbury's like-for-likes up 0.2% in first quarter

Sainsbury’s saw its first quarter like-for-like sales edge up 0.2% excluding fuel as it benefited from a programme of price reductions across some of its key food categories.

FOOD & DRINK

Sainsbury's like-for-likes up 0.2% in first quarter

Sainsbury’s saw its first quarter like-for-like sales edge up 0.2% excluding fuel as it benefited from a programme of price reductions across some of its key food categories.

In the 16 weeks to 30 June grocery sales grew by 0.5% with online sales in the category rising by 7.3%. Sales in the supermarket’s convenience business climbed by 3.6%.

Meanwhile, general merchandise sales increased by 1.7% while clothing sales saw an uplift of 0.8%.

On a total basis, retail sales were up 0.8%.

Sainsbury’s said it invested £150 million in lowering prices in the period which has improved its price position across key categories. It is also investing in food quality and completed 51 range reviews in the quarter, covering 27% of grocery sales.

Mike Coupe, group chief executive of J Sainsbury, said: "I am pleased with our progress in the quarter. The headline numbers reflect the level of price reductions we have made in key areas like fresh meat, fruit and vegetables since March. Our price position has improved and customers have responded well, resulting in a continuation of the improved volume trend we saw in the second half of last financial year.“

The retailer said improvements to its online service meant that same day grocery online delivery is now available from 171 stores, covering 57% of UK households. It also opened a new convenience store in the period and experienced its biggest ever sales week in the convenience business in the quarter

Coupe added: "We are transforming our business to meet the changing needs of our customers. We have made fundamental changes to the way we run Sainsbury's stores. We have completed our store management restructure, which will ensure that our shops are run efficiently and in a way that puts customer service at the heart. We have also confirmed our plans to increase our colleague hourly rate of pay to an industry-leading £9.20 an hour from September and will introduce one simple, fair and consistent contract for all Sainsbury's store colleagues.”

During the period Sainsbury’s opened 37 Argos stores in its supermarkets, bringing the total to 228. Some 18 of the 37 stores replaced an existing Argos store, taking the total number of replacement stores to 84. Sainsbury’s expects to open around 90 Argos stores in Sainsbury's supermarkets in the 2018/19 financial year.

Speaking of the proposed merger with Asda, Coupe said: "The market remains competitive. However, we have the right strategy in place and our proposal to combine Sainsbury's and Asda will create a dynamic new player in UK retail, with the scale to give customers more of what they want today and create a more resilient and adaptable business for the future.”

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