* Q3 like-for-like sales, ex fuel, up 0.9 pct, as expected
* Outcome driven by growth of online, convenience sales
* Says positioned to perform well in Q4
* Says won't be hurt by any Tesco revival
* Sainsbury shares down 3 pct
By James Davey
LONDON, Jan 9 Despite a strong performance
online and at convenience stores, sales growth at J Sainsbury
, Britain's third-largest supermarket chain, slowed to a
trickle in the last quarter of 2012, outpaced by price
Though the company trumpeted record Christmas sales and a
32nd consecutive quarter of underlying sales growth, the 0.9
percent rise in revenue excluding fuel and new stores was down
from 1.9 percent in the previous quarter, though in line with
"We think when the reporting season is over ... that we'll
emerge clearly as the winner," Chief Executive Justin King said
"We're growing market share," he said.
Industry data a day earlier showed Sainsbury's did post the
highest sales growth of Britain's "big four" grocers in the 12
weeks to Dec. 23 and was the only one to raise its market share.
But with the latest consumer price inflation figures running
at 2.64 percent and food price inflation at 4.1 percent,
according to the British Retail Consortium, that still leaves
Sainsbury's with negative real growth, as consumers worried by
job security and a squeeze on incomes spend more carefully.
Data showed market leader Tesco's sales growth was
the second highest among the big four and also highlighted much
stronger growth at the discount end of the market, led by Aldi
and Lidl, and at the premium end at John Lewis's
Some analysts say Sainsbury's is vulnerable to a recovery at
Tesco, which is investing 1 billion pounds ($1.6 billion) in a
plan to revive its fortunes after a dismal Christmas in 2011 led
to its first profit warning in 20 years.
"We suspect Sainsbury will struggle to outperform in 2013 as
Tesco continues its fight back and there is some margin
vulnerability as momentum slows," said Seymour Pierce analyst
No. 4 chain Wm Morrison on Monday posted a 2.5
percent fall in like-for-like sales excluding fuel for the six
weeks to Dec. 30, while Tesco is tipped to report on Thursday
underlying growth of 0.5-1.5 percent in its home market for the
six weeks to Jan. 5, partly reflecting easier comparatives with
last year. Second-ranked Asda, owned by U.S. giant Wal-Mart
, is not due to report until February.
TOUGH TIMES TO PERSIST
Sainsbury said it was well positioned for the next quarter,
though it expected a tough economic backdrop to persist, with
shoppers looking to re-balance budgets after Christmas.
Its online sales grew at over 15 percent, and its
convenience stores managed gains of more than 17 percent,
accounting for two thirds of its like-for-like growth.
Sainsbury's has also benefited from the success of its
"Brand Match" pricing initiative, a big push into non-food
areas, and a boost to its profile from its sponsorship of the
London Paralympic Games.
In November, however, it had guided for second-half
like-for-like sales growth similar to the 1.7 percent made in
the first half.
"We expect consensus second half like-for-like (sales
growth) to edge down towards 1 percent," said analysts at Credit
King attributed the slowdown to tough comparative numbers
after a strong Christmas in 2011, a lower contribution from
store extensions, and higher sales of own-brand products, which
are cheaper than branded goods and grew at three times the rate
of brands in the quarter.
"One of the reasons I suspect that we've seen a switch to
own label is that it's a great way for consumers to dial out
inflation," said CEO King.
Responding to persistent speculation that he may leave
Sainsbury's this year, he said: "I see myself here for the long
Shares in Sainsbury's, up 13.5 percent over the last year,
were down 3 percent at 329.8 pence at 1132 GMT, valuing the
business at about 6.2 billion pounds. Tesco shares were down 1