‘Sainsbury’s marketing helps it outperform rivals’

Sainsbury’s has posted a like for like sales increase of 4.2 per cent in its fourth quarter, driven by performance in non-food categories, as the supermarket continues to outperform rivals.

Brand Match and own brands boost performance.

Non-food sales are growing at three times the rate of food sales, according to CEO Justin King. Clothing sales are particularly strong with the supermarket’s partnership with celebrity stylist Gok Wan helping increase sales 20 per cent year on year.

Own brand ranges have also continued to grow and sales of its relaunched mid-tier By Sainsbury’s food range increased 9 per cent year on year in the three months to 16 March.

Sainsbury’s convenience store division increased by 18 per cent year on year in the period while online grocery sales continue to grow at 20 per cent serving more than 190,000 customers per week, the supermarket says.

King says: “We have delivered strong sales in the fourth quarter, increasing market share and outperforming in what remains a tough retail environment … Our focus on quality is an important reason why customers choose to shop with us, and why we are seeing strong growth in our own-brand products.

“We expect the challenging economic environment to continue through the coming year. By helping our customers to Live Well for Less through our ongoing commitment to great quality own-brand products, Brand Match, competitive pricing and targeted promotions via Nectar and coupon-at-till, we are well positioned to continue to outperform the market.”

Same store sales for the full year increased by 2.1 per cent.

King also took the opportunity to reiterate the supermarket’s commitment to sourcing all its beef and chicken from British farms saying: “Our values are a long-term, strategic point of difference. The issues experienced by the industry over the last quarter underscore the importance of our detailed understanding of our supply chain.”

Analysts have credited Sainsbury’s “astute” promotional strategy combining Brand Match with targeted promotions using Nectar data and “complementary creative campaigns” for Sainsbury’s outperformance of the market.

Joseph Robinson, lead consultant at Conlumino, says: “These investments have acted as bulwark against crumbling customer loyalty across the sector, helping Sainsbury’s to subdue the impact of a continued transfer of spend to the increasingly mainstream hard discounters and a resurgent Tesco.”

Morrisons posted a 2.1 per cent fall in like for like sales for the year to 3 February while Asda reported a slowdown in sales in its final quarter with like for like sales flat in the three months ending 5 January.

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