Sainsbury’s Reports Strong Christmas Trading

King: "While food price inflation eased in the quarter as expected, a winning combination of more customers, enjoying even better products and prices through more stores delivered total sales growth of 6.2 per cent."

7 Jan 2010 --- UK retailer Sainsbury’s has reported a record Christmas to complete a strong Third Quarter. Total sales for the third quarter were up 6.2 per cent (6.3 per cent excluding fuel). Like-for-like sales for third quarter up 3.8 per cent (3.7 per cent excluding fuel). Like-for-like sales for third quarter up 4.2 per cent excluding fuel and VAT. Weekly transactions up one million year on year.

Justin King, chief executive, said, "Sainsbury's has delivered a strong trading performance over the past 13 weeks resulting in like-for-like sales growth, excluding fuel, of 3.7 per cent, or 4.2 per cent VAT adjusted. Our strategy of delivering great food at fair prices has resulted in a record Christmas performance, completing a strong third quarter on top of good growth last year. While food price inflation eased in the quarter as expected, a winning combination of more customers, enjoying even better products and prices through more stores delivered total sales growth of 6.2 per cent.

We served on average one million more customers each week over the quarter, hitting an all time high of 24 million in the seven days up to and including Christmas Eve. We continue to deliver record levels of customer service and availability, demonstrating the commitment of colleagues on behalf of customers, particularly given the difficult weather conditions in the run up to Christmas. We are delighted to have offered permanent roles to over 1,000 of the colleagues we recruited for temporary roles at Christmas.

Great Food is at the heart of what we do. Our continued investment in quality has enabled customers to place the quality food they want at a price they can afford onto their festive table. Our Nectar data shows that over 14% more customers bought their turkey and trimmings from us than last year and we more than trebled sales of our multi-award winning own brand Blanc de Noirs Champagne. It is our great quality food offer at fair prices that has led to our record Christmas.

Our Complementary Non-Food range grew at over four times the rate of food in the quarter. Investment in infrastructure has enabled a substantive step up in the execution of marketing led events, such as Halloween, Toys and Entertainment as well as good growth in clothing and Christmas ranges. Our ‘January Sale' has also started well.

The Nectar loyalty programme has proved increasingly important in a competitive market. There are over 16 million registered Nectar card holders with regular Sainsbury's users up 750,000 versus this time last year. The roll out of our ‘coupon at till' scheme was a clear winner with customers, who have responded to the targeted offers and rewards. The launch of our double Nectar point campaign for Sainsbury's Finance products is working well and successfully increasing sales amongst our customer base.

Our New Space development is on track to grow gross space by 15 per cent in the two years to March 2011. In the quarter, we have opened eight new supermarkets including six stores acquired from Co-op/Somerfield and two ‘replacement' supermarkets (including Braehead at 68,000 square feet) and have completed five store extensions. This year we had 32 more supermarkets open for Christmas than last year driving a further step up in the contribution from net new space to sales growth of 2.6% in the quarter.

Our Channels strategy continues to perform well. Online grocery sales grew strongly up over 15 per cent in the quarter and we delivered a record half a million online orders over the four key trading weeks before Christmas. Our non-food online channel was open for its first Christmas giving customers nationwide access to over 8,000 non-food products. Our convenience business also traded well and a further eight convenience stores were opened in the quarter, bringing the total opened in the financial year to date to 27.

The business continues to perform well in what remains a challenging consumer environment. Our universal customer appeal together with our accelerated growth plans means we are well placed to make continued good progress in 2010”, King concluded.