* Q4 like-for-like sales up 3.6, ex fuel; f'cst up 2.3 pct
* Convenience growing at 18 pct yr-on-yr, online 20 pct
* Says well placed to continue outperforming market
* No plans to extend "Brand Match" to own-label
* Shares up 2.6 pct
By James Davey
LONDON, March 19 J Sainsbury, Britain's
third-biggest grocer, beat forecasts for underlying sales in its
fourth quarter, with strong growth online and in convenience
stores more than offsetting a weaker performance in its
Online sales and convenience stores are the two fastest
growing areas for Britain's supermarkets as shopping habits
change, with consumers increasingly using the internet to shop
and high fuel prices discouraging trips to town centres and
Sainsbury's, which trails by annual revenue market leader
Tesco and Wal-Mart's Asda, said on Tuesday its
convenience store business was growing at over 18 percent
year-on-year, driven by a combination of new selling space and
like-for-like sales growth, while online grocery sales were
increasing nearly 20 percent year-on-year.
Those channels drove a 3.6 percent rise in its like-for-like
sales, excluding fuel, in the 10 weeks to March 16.
That was the 33rd consecutive quarter for underlying sales
growth and compared with analysts' average forecast for a rise
of 2.3 percent, and growth of 0.9 percent in the third quarter.
It was considerably ahead of a fourth-quarter like-for-like
sales fall of 4.1 percent reported by fourth-ranked grocer Wm
Morrison last week and analysts' expectations that Tesco
will next month post a flat to small drop in its fourth-quarter
Sainsbury's chief executive Justin King said the firm had
won market share and was well positioned to continue to
outperform rivals in its new financial year, even though he
expected the economic environment to remain tough.
Shares in Sainsbury's, up 21 percent over the last year,
were up 2.6 percent at 375 pence at 0948 GMT, valuing the
business at 7.09 billion pounds.
"Sainsbury ... has quite materially outperformed its major
supermarket peers in the UK through its last quarter," said
Shore Capital analyst Clive Black, who nudged up his 2012-13
pretax profit forecast to 750 million pounds.
After stripping out inflation Sainsbury's recorded volume
growth for the first time since the Christmas quarter in 2009.
Last month Asda said it had seen positive like-for-like
sales volumes for the first time in three years.
Sainsbury's, whose market share currently stands at about 17
percent, 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 clothing and home accessories.
And unlike Tesco and Asda it has not been implicated in the
horsemeat scandal, with none of its products testing positive
for equine DNA.
Some analysts say Sainsbury's is vulnerable to a recovery at
Tesco, which has invested 1 billion pounds in a revival plan
following a dismal Christmas in 2011 which led to its first
profit warning in 20 years.
Last week Tesco launched a "Price Promise" campaign which
compares at its tills the overall cost of a basket of branded,
own-label and fresh food items with the same or equivalent
products of rivals.
King said Sainsbury's had no plans to extend its "Brand
Match" promotion to own-label products.
"We think the strength of 'Brand Match' is precisely that it
is brand match. You've already seen some significant
conversation around Tesco's price match as to how on earth one
truly and fairly compares own-label," he said.
Britain is teetering on the brink of a third recession in
four years and consumers are fretting over job security, wages
growth not keeping up with inflation and government cuts.
With finance minister George Osborne delivering his budget
speech on Wednesday, King called for a national insurance tax
holiday for new employees and other job creation measures.
Some 26 percent of Sainsbury's equity is owned by the Qatar
Investment Authority, which was said by a newspaper on Sunday to
be planning a bid for British clothing and food retailer Marks &