Sainsbury’s Sales Up 6.2% in Final Quarter

King: These sales reflect the strength and resilience of the Sainsbury’s brand as we have continued to develop our offer to help customers get the best value from their household budgets.

25/03/09 UK retailer Sainsbury’s has said that total sales for fourth quarter were up 3.4 per cent (6.8 per cent excluding fuel), with like-for-like sales for fourth quarter up 2.7 per cent (6.2 per cent excluding fuel). Like-for-like sales for the second half were up 3.4 per cent (5.3 per cent excluding fuel).

Justin King, chief executive, said: “We’ve delivered a strong performance in the final quarter of the year with like-for-like sales, excluding fuel, up 6.2 per cent. Adjusting for the negative impact of the change in the rate of VAT, like-for-like sales growth in the quarter, excluding fuel, was 7.0 per cent. Second half like-for-like sales, excluding fuel, grew by 5.3 per cent with full year like-for-like sales, excluding fuel, increasing by 4.5 per cent. These sales reflect the strength and resilience of the Sainsbury’s brand as we have continued to develop our offer to help customers get the best value from their household budgets.

“Our work on providing universal customer appeal through continued investment in price, quality and a broader product range has been well received and is evident in the sales announced. We are serving more customers with more items as both transactions and basket size have increased year-on-year. We have also maintained our high performance levels in key customer metrics, such as product availability and service. Our price perception metric recorded the biggest improvement of the measurements we track on a regular basis. As customers increasingly compare and contrast the value offered by different supermarkets, they see they can get both great products and fair prices in Sainsbury’s stores.

“We are seeing some significant changes in the mix of products customers are choosing to buy. Our ‘Switch and Save’ campaign in January focused on our entry price point range ‘basics’, sales of which are up over 60 per cent year-on-year. But while customers are looking to economise they are increasingly concerned about ethical issues. We have worked hard to provide this in our delivery of universal appeal. In January we doubled our range of higher welfare pork and all our own-brand pork sausages, including ‘basics’, are made from British meat. In February we became the first major retailer to stop selling eggs laid by battery hens and we have recently expanded the choice of higher welfare chicken with the launch of our new Freedom Food range.

“In February we launched our fifth Sainsbury’s Active Kids programme and our participation in Red Nose Day on 13 March contributed an estimated 0.3 per cent to sales growth in the quarter. Customers and colleagues helped us donate over £10 million to Comic Relief. We are the charity’s largest corporate partner having donated over £40 million in the last ten years and during the week of Red Nose Day over 19 million customers shopped with us, our highest number of weekly transactions outside of Christmas.

“Non-food sales continue to grow strongly. We have grown our market share in clothing with Tu clothing now available in 290 stores and have accelerated the roll out of the Tu Home range. Our online home shopping service continued to perform well with sales growth of over 20 per cent in the quarter.

“During the quarter we opened one and extended two supermarkets and opened two new convenience stores. We also completed the sale and leaseback of a further mature store for £48 million. As announced on 4 March 2009, we have agreed the acquisition of 24 stores from the Co-operative Group which are an excellent addition to our portfolio being mainly in the west of England, Wales and Scotland where we are less well represented. An extra 500,000 customers will now have a Sainsbury’s store within a ten minute drive and we are also pleased to welcome 1,400 new colleagues to Sainsbury’s.

“We expect the current economic environment to remain challenging but our focus on delivering universal appeal through great products at fair prices means we are well positioned to continue our good progress.”