LONDON J. Sainsbury (SBRY.L), Britain's third largest grocer, said it was too early to call an end to the country's economic downturn, arguing strong trading over the summer was no more than "a blip."
Sainsbury's and other British retailers are still taking a cautious view of the market for the year ahead even though official data and surveys have shown an improving outlook for UK consumer spending, which generates about two-thirds of gross domestic product.
British Retail Consortium data, for example, has suggested Britons are feeling more confident about spending money.
"Whilst there are some economic signs that the economy is improving, you're not yet seeing that evidenced in consumer behavior," Sainsbury's Chief Financial Officer, John Rogers, told the Reuters Global Consumer and Retail Summit on Monday.
"The blip over the summer brought about by the very good weather is just that - it's a bit of a blip," he said at the summit.
Government austerity measures and low-wage growth since the financial crisis have squeezed household budgets, making shoppers cautious on spending.
Rogers said that in the run-up to Christmas he expected consumers to return to the pattern of behavior seen over the last three years - saving money with a view to splashing out over the festive period.
He said the key driver of a more sustained improvement in consumer expenditure was a further narrowing of the differential between inflation and wages inflation.
"Consumers are still in a place of tightening their belts, watching how they spend and savvy shopping. All the patterns of behavior that we've seen evidenced over the last two to three years we are not seeing any change in," he said.
British finance minister George Osborne said on Monday that the UK economy has turned a corner and that its accelerating economy vindicated the government's austerity program.
Sainsbury's has been outperforming its "big four" rivals Tesco (TSCO.L), Wal-Mart's WMT.L Asda and Morrisons (MRW.L), with robust growth online and at convenience stores more than offsetting underlying sales falls in its traditional stores.
In June, it reported first quarter like-for-like sales growth of 0.8 percent, and maintained its guidance for full year growth of 1.0-1.5 percent.
Sainsbury's was alone among the big four in growing ahead of the market in the last three months, according to data from Kantar Worldpanel.
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(Additional reporting by Neil Maidment. Editing by Jane Merriman)