The UK’s third-largest supermarket reported that sales at stores open more than a year, excluding fuel, rose 0.1% in the three months to 12 March.
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For fiscal 2015, total retail sales, excluding fuel, increased 0.4 percent, but was down 1.2 percent including fuel. Over the quarter, the supermarket maintained market share against a backdrop of increasing competition from the likes of Aldi and Lidl, although Tesco and Asda are losing ground.
The uptick in sales is a significant boost for the Big Four grocer, coming after sales dropped 1.9% a year earlier amid an ongoing supermarket price war.
He said clothing sales had recovered after being hit by unseasonable weather in previous quarters, growing more than 10%, while strong releases – including Adele’s new album and James Bond movie Spectre – had seen entertainment sales rise almost 11%.
“Sainsbury’s Bank continued its good performance with 15 per cent volume growth in Insurance new business and 12 per cent growth in Travel Money in-store transaction volumes”.
“We have delivered a strong performance this quarter”.
But the real question is what is happening with Sainsbury’s bid for Argos, a decision of what to do next has been pushed back until 18 March after it was gazumped by Christo Wiese-backed Steinhoff, which is offering £1.4bn. It originally offered £1.3bn.
Analysts suggested the growth could help Sainsbury’s in its pursuit of Argos owner Home Retail Group.
He also hailed the launch of new products to answer customer demand for healthy eating, including vegetable-based product innovations including “boodles”, or butternut squash noodles, and spiralized courgette “courgetti”, plus new lines added to the bread range including the rye loaf and sprouting grain boule. He, however, noted that the market would remain competitive with food deflation continuing to impact sales growth.
“We have traded well this year and are making excellent progress implementing our strategy”, said CEO Mike Coupe.
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Sainsbury’s said it expected the market to remain competitive but was confident it would continue to outperform its major peers.
