LONDON Jan 8 British grocer J Sainsbury
eked out a tiny rise in underlying sales in its
Christmas quarter, with its rate of growth slowing significantly
in a tough overall market.
The group, which trails market leader Tesco and is
battling with Wal-Mart Stores' Asda to be the UK's No. 2
grocer, said on Wednesday sales at stores open over a year rose
0.2 percent, excluding fuel, in the 14 weeks to Jan. 4, its
fiscal third quarter.
Though that was ahead of analysts' forecasts which ranged
from flat to down 1 percent and represented a 36th consecutive
quarter of underlying sales growth, it was a slowdown from
second quarter growth of 2.0 percent.
Sainsbury's total third quarter sales rose 2.7 percent,
excluding fuel, and the firm heralded its "best Christmas ever".
Britain's major grocers are finding the going tough, despite
their focus on essential goods, as consumers' disposable incomes
remain under pressure from wage rises not keeping up with
Analysts reckon all of the UK's so called "big four" grocers
lost market share and saw like-for-like sales volumes decline in
the run-up to Christmas, reflecting a subdued overall market and
increased promotional activity.
They are also being by squeezed between hard discounters
Aldi and Lidl and upmarket grocers
Waitrose and Marks & Spencer.
Sainsbury's Chief Executive Justin King said the quarter was
characterised by a "very tough sales environment" throughout
October and November, but with record numbers of customers and
strong sales in the key period over Christmas.
"As with last year, we expect customers to spend cautiously
in the few months following Christmas, in an attempt to
rebalance the household finances," he said.
Aldi and Lidl both said on Tuesday they enjoyed record
trading at Christmas. Tesco updates on Thursday and is forecast
to report a fall in UK sales at stores open over a year,
excluding fuel and VAT sales tax, of 0.5-2.5 percent for the six
weeks to Jan. 4.
Asda said on Monday it saw a good performance at Christmas
both in store and online but will not release figures until Feb.
20. No. 4 player Morrisons will update on Jan. 20.
The Co-operative group said on Wednesday that its total food
sales over the 13 weeks to Jan. 4 were flat.
Sainsbury's strategy is focused on own-brand products and
investing in online and local convenience store channels.
In its third quarter online grocery sales rose over 10
percent, while convenience sales were up nearly 18 percent.
Shares in Sainsbury's, up 11.2 percent over the last year,
closed Tuesday at 368.9 pence, valuing the firm at 7.02 billion