Sainsbury's report 'strong sales'

Sainsbury's piled more pressure on rival Tesco with another quarter of strong sales, driven by demand for own-brand ranges

Sainsbury's and Tesco
Sainsbury's and Tesco

Sainsbury's piled more pressure on rival Tesco with another quarter of strong sales, driven by demand for own-brand ranges.

The UK’s third biggest grocer announced a 2% rise in non-fuel like-for-like sales for the 16 weeks to September 28 and said it was the only major supermarket to be growing market share.

It own-brand offer, which includes Taste the Difference, has continued to grow at twice the rate of sales of branded goods.

Meanwhile, its groceries online business grew by more than 15% in the quarter and is now worth more than £1 billion in annual sales.

The company’s latest performance, which extends its run of underlying sales growth to a 35th quarter, also reflected 20% growth for its convenience stores as customers topped up during the warm summer.

Chief executive Justin King said the trend of “savvy shopping” had continued despite encouraging signs on the economy.

He added: “We have delivered strong sales over the quarter, continuing to outperform the market in what remains a tough retail environment.”

The retailer said it opened 31 convenience stores and five new supermarkets in the period, adding 307,000 square feet to the estate.

Its general merchandise and clothing business continues to grow at over twice the rate of food, with its recently relaunched Tu clothing brand now available in nearly 400 stores.

The underlying sales rise was stronger than the rate of 0.8% in the previous quarter and comes despite comparisons with strong trading a year earlier, when it sponsored the Paralympic Games.

George Scott, an analyst at retail consultancy Conlumino, said the chain was seeing “renewed momentum” in the face of intense price rivalry among the “big four” chains and discounters Aldi and Lidl.

He added: “Wider afield, the growing impetus of Waitrose, which has also successfully bridged the value-quality spectrum, will pose threats at both convenience and supermarket levels.”

Meanwhile, Tesco’s loss-making shops in China are to be swallowed up in a joint venture with a much larger retailer as the brand looks likely to disappear from the world’s second-largest economy. It is the latest stage of the supermarket giant’s retreat from unsuccessful overseas forays after it disposed of US chain Fresh & Easy last month. The group’s China business has grown from 56 stores five years ago to 134 stores in 11 Chinese provinces today, in addition to a series of Lifespace shopping malls, most in partnership with local businesses.

It is paying a total of £345 million for a 20% stake in a new venture that will combine the outlets with the China Resources Vanguard (CRV) business of 2,986 stores to create the country’s leading retailer. The deal, expected to be completed in the first half of next year, will create a business with sales approaching £10 billion.

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