Sainsbury posts increased sales for third successive quarter

Sainsbury posts increased sales for third successive quarter

	Published : Fri, 07 Oct 2005 19:05 By : Phil Bateman Print this Story

LONDON: British supermarket group J Sainsbury Plc. recorded increased sales for a third successive quarter for the first time since 2002 after it slashed prices to attract customers in a fiercely competitive high street. The company, however, said higher provisions to take care of bad and doubtful debt at its banking arm would result in the financial services unit posting a first half loss.

The company, now in the thick of a revitalisation programme, said same-store sales, including fuel, rose 4.1 per cent in the 16 weeks ending October 8. Excluding fuel, like-for-like sales were up 2.8 per cent. Sales for the group as a total, which included new space, rose by 6.6 per cent in the quarter.

The company's chief executive Justin King was upbeat and said it is a very strong figure in the context of quite a weak market.

This is, however, not evident in research firm TNS' findings recently that Sainsbury's market share remained at a static 15.7 per cent, while that of market leader Tesco was put at 30 per cent.

Sainsbury had launched an advertising campaign, "Try Something Different Today," and Kind said this has started yielding results.

Analysts are, however, not convinced that the recovery is there to last. They feel it is too early to describe it as a major one.

King claimed the company's in-store product availability, one of its weakest points, is now back to levels comparable with the rest of the industry. The product availability as measured by in-store pickers for the "Sainsbury's To You" online home delivery business had improved to over 95 per cent.

The company said grocery prices had fallen by 1.7 per cent in the quarter, but this has been rather compensated by increased petrol and fuel prices, which helped to bring the price inflation to 0.9 percent for the period.

The company is ploughing 400 million pounds into lower prices over the next three years, as it has cut the prices of 2,000 items since the start of the year, in addition to 6,000 cuts introduced in 2004. The Grocer magazine in September had described Sainsbury to be the cheapest of the country's big four grocers.