Belfast Telegraph

Sainsbury's posts first rise in sales for over two years

By Ben Woods

Supermarket Sainsbury's, which has 13 stores in Northern Ireland, has stepped up its performance after posting its first quarterly like-for-like sales growth for more than two years.

Britain's second-biggest grocer, which employs around 3,000 people here, said that like-for-like retail sales, excluding fuel, rose 0.1% in the fourth quarter, compared with a fall of 0.4% in the third quarter.

The upturn in results is a significant boost for the Big Four grocer, coming after sales plummeted by 1.9% a year earlier amid a supermarket price war that continues today.

The sales statistics come just days ahead of a March 18 deadline for Sainsbury's to improve its offer for the Home Retail Group, the parent company of Argos.

The chain said the proposed deal would create a "world-leading'' retailer bigger than rivals John Lewis and Amazon UK when it tabled an improved £1.3bn offer in February.

Since then, South African retailer Steinhoff has attempted to gatecrash the supermarket's cash and shares deal with a £1.4bn offer.

Chief executive Mike Coupe said that Sainsbury's had delivered a "strong performance" in the fourth quarter as it recorded like-for-like sales and volume growth while also maintaining its market share. He added: "We are progressing well with our quality investment in 3,000 own-brand products.

"The new year is traditionally a time when customers focus on healthy eating, and to cater for this demand we launched a number of vegetable-based product innovations including boodles (butternut squash noodles) and courgetti (spiralised courgette), which are proving extremely popular with our customers."

Sainsbury's refused to be drawn on whether it would pitch a third offer for Home Retail before the deadline, but it reaffirmed its position that it would not pay over the odds for the company .

Mr Coupe said: "The Argos bid is not a must-do deal at any price, and if it doesn't go ahead, Sainsbury's will continue."

Shares in Sainsbury's were down more than 1%.

Alongside the fourth quarter like-for-like sales growth for the nine weeks to March 12, 2016, total retail sales, excluding fuel, also grew 1.2% over the period.

It is the first time the supermarket has seen like-for-like retail sales, excluding fuel, grow in a quarter since the third quarter of 2013/14 when sales edged up 0.2%.

Mr Coupe said the fourth quarter sales growth was the result of a "very rounded performance" from the business.

Performance was bolstered by rising online sales and a strong performance from its clothing and entertainment divisions.

He said clothing sales had recovered after being hit by unseasonable weather during previous quarters, increasing by more than 10%, while strong releases - including Adele's new album and James Bond movie Spectre - had seen entertainment sales rise nearly 11%.

Online grocery sales climbed close to 14% over the period, while orders rose nearly 19%.

The company, which has 601 supermarkets and 773 convenience stores across the UK, said its promotional participation levels had reduced year-on-year, running at an average of 28% for the quarter.

Belfast Telegraph