* Q1 like-for-like sales up 0.8 pct, excluding fuel
* Slowdown from Q4 reflects comparison with Jubilee last
* Q1 total sales up 3.3 pct, ex fuel
* Says well placed to continue to outperform market
* Shares up 0.4 pct, up 26 pct in last year
By James Davey
LONDON, June 12 Sales at Britain's No. 3 grocer
J Sainsbury outperformed market leader Tesco
in the first quarter, stellar growth online and in convenience
stores more than offsetting sales falls in traditional
The group, which trails Tesco and Wal-Mart's Asda by
annual revenue, said it expected to continue to steal share from
rivals, even though it anticipated Britain's tough economic
environment would persist through 2013.
"What we're looking at is data that still says people's
outlook is pretty downbeat but not as downbeat as it was," Chief
Executive Justin King told reporters on Wednesday.
Britain's supermarkets, despite their focus on essential
goods, have not been immune to the economic downturn and are
battling intensely for market share.
Online and smaller local convenience stores are the two
fastest growing areas in the industry as shopping habits change.
Consumers are increasingly using the internet to shop and high
fuel prices are discouraging trips to town centres and
Sainsbury's online grocery sales rose 16 percent in the 12
weeks to June 8, its fiscal first quarter, while convenience
store sales increased 20 percent.
Those channels drove a 0.8 percent rise in the firm's sales
at stores open over a year, excluding fuel.
That was a 34th consecutive quarter of underlying sales
growth. Analyst forecasts had ranged from growth of 0.6 to 2
National retail sales data for May are due on June 20, with
industry surveys giving a mixed picture after a plunge in April.
Sainsbury's performance compared to a first-quarter
like-for-like sales fall of 1 percent at Tesco, a 1.8 percent
decline at No. 4 grocer Wm Morrison, and a 1.3 percent
rise at Asda, albeit for different trading periods.
But it did represent a slowdown from growth of 3.6 percent
in the fourth quarter of the 2012-13 year.
That mainly reflected comparisons with an extra bank holiday
last year to celebrate the Queen's diamond jubilee but it also
reflected pressure on food sales in core stores.
King said that stripping out the contribution of online and
convenience, like-for-like sales in core stores were negative.
"You must remember that our online sales are an in-store
pick model, so as far as our stores are concerned that still
represents growth and leverages that asset," he said.
Shares in Sainsbury's, up 26 percent over the last year,
were up 0.4 percent at 364 pence at 0934 GMT, valuing the
business at about 6.9 billion pounds ($10.8 billion). They had
fallen initially after the sales numbers were published.
"The performance is below par in terms of bricks and mortar
core food sales ... We think the shares will continue the recent
pause for breath," said Panmure Gordon analyst Philip Dorgan.
Sainsbury's, whose current grocery market share is at a
decade high of 16.8 percent, just behind Asda, has also
benefited from the success of its "Brand Match" pricing
initiative, growth of own-brand sales and a big push into
non-food areas such as kitchen electricals and cookware.
And unlike Tesco and Asda it has not been implicated in the
horsemeat scandal, with none of its products testing positive
for equine DNA.
While Sainsbury's is currently the fastest-growing of
Britain's quoted grocers, monthly industry data has shown
high-end player Waitrose, owned by John Lewis, and
discounters Aldi and Lidl recording the strongest growth over
the last year.
Sainsbury's total first quarter sales rose 3.3 percent,
Last month the firm forecast like-for-like sales growth for
the 2013-14 year of 1 to 1.5 percent.