Sainsbury's enjoys sales boost after horse meat scandal
Sainsbury's posted better-than-expected sales figures after a quarter in which no horse meat was found in any of its products.
The grocery chain said it increased market share in the 10 weeks to March 16, with 3.6% growth in like-for-like sales and an improvement in the average number of transactions per week to a record 22.9m.
With all its fresh beef sourced from the UK and Ireland and DNA testing carried out on its products for the last 10 years, Sainsbury's said recent tests on more than 300 products revealed no horse meat.
Chief executive Justin King added: "The issues experienced by the industry over the last quarter underscore the importance of our detailed understanding of our supply chain."
Total revenues were up 7.1% when including petrol sales and an increase in trading space of about 5% over the last financial year.
Valentine's Day and Mother's Day were particularly strong for the retailer and Red Nose Day resulted in the company presenting a cheque for £10.5m on behalf of customers and staff.
Sainsbury's said its general merchandise and clothing business was growing at three times the rate of food and in February reached the milestone of £1bn annual sales.
Its convenience store business is also growing at 18% year-on-year and online grocery shopping increased sales by nearly 20% on a year earlier.
Yesterday's like-for-like figure of 3.6% is much stronger than the 2.3% estimated by City analysts and comes after growth of 1.7% in the first half of the year and 0.9% in the previous quarter.
Sainsbury's shares rose 3% following the update.
Panmure Gordon stockbrokers analyst Jean Roche said: "This is a very strong performance, helped to an extent by Morrisons' under-performance and 'horsegate', which will have impacted Tesco."
Recent industry figures from Kantar Worldpanel showed the chain was the only one of the big four supermarkets to gain market share during the 12 weeks to February 17, up to 17% from 16.9% a year earlier.
According to Shore Capital, Sainsbury's profits for the year to March will be around £750m, compared with £712m a year earlier.