Sainsbury’s growth slows but it continues to outperform rivals

Sainsbury’s reports slowdown in sales growth but it outperformed the market in its first quarter.  

Sainsbury's

The supermarket, which was recently named Marketing Week’s Brand of the Year 2013, reported a 0.7 per cent rise in sales at stores open for more than a year in the three months to 8 June. Total sales increased 3.6 per cent.

The rise marks a slowdown from the 3.6 per cent like for like increase reported in its fourth quarter.

The supermarket also increased its market share 0.2 per cent during the period to 16.8 per cent and claims it is the only major grocer growing market share.

Sainsbury’s says its convenience store division is growing at 20 per cent, driven by new stores. It opened 19 new sites during the period and plans to open two new c-stores a week for the rest of the year.

Non-food categories are growing at twice the rate of food, which CEO Justin King says is driven by the supermarket’s strategy to focus on kitchen and homeware items that complement its food offering.

Online grocery is growing at 16 per cent, the supermarket claims.

Sales of its core own label “By-Sainsbury’s” range increased 7 per cent during the quarter following the completion of the rebrand and relaunch of its own-label nappy brand Little Ones to coincide with the withdrawal of the Huggies brand from the UK market helped drive performance, the supermarket says.

Its premium own-brand range ‘Taste the Difference’ is growing at more than 10 per cent and reached £1bn in annual sales.

Justin King, Sainsbury’s CEO, says: “This has been a solid performance in what continues to be a tough consumer environment. During the quarter we lapped some of our strongest performance of last year, culminating in the Queen’s Diamond Jubilee, and have extended our track record to 34 quarters of like-for-like growth.

“We expect the challenging economic environment to continue through this financial 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.”

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