September 12, 2012 / 8:05 PM / 6 years ago

Sainsbury: Games a "starting gun" to better times

LONDON (Reuters) - (For other news from Reuters Retail and Consumer Summit, click here)

J Sainsbury (SBRY.L), Britain’s third-biggest supermarket group, is hopeful the feel good factor engendered by the success of the London Olympic and Paralympic Games could mark a turning point for retail demand in a nation enduring a double dip recession.

“There’s been a transformation in the mood of the nation. There’s been a huge amount of goodwill generated by the Games,” Mike Coupe, the company’s commercial director, said at the Reuters Retail and Consumer Summit on Wednesday.

“The question is whether or not that will continue or whether the nation will have a hangover. One would like to think that maybe this is the starting gun for perhaps a change in consumer sentiment.”

Sainsbury was a major sponsor of the Paralympic Games, which ended on Sunday.

Coupe said that British families on average were about 20 pounds ($32.20) a week worse off in terms of disposable income than they were two and a half years ago. However, the worsening trend had now flatlined.

“We’re seeing all the negative influences, particularly taxation and inflation, have kind of worked their way through the system,” he said at the summit, held at the Reuters office in London.

Coupe said he would welcome government initiatives to stimulate growth of the British economy, particularly those focused on job creation and improving infrastructure.

“History would say investment in business, reducing regulation, reducing bureaucracy, particularly around planning, have all got to be good things in terms of stimulating growth,” he said.

Many retailers across Europe are struggling as consumers’ disposable incomes have been squeezed by rising prices, muted wages growth and government austerity measures, and confidence has been sapped by the euro zone debt crisis.

Sainsbury, which lags industry leader Tesco (TSCO.L) and Wal-Mart’s (WMT.N) Asda in UK market share, has been outperforming rivals helped by strong growth online and in smaller convenience stores.

The company has also highlighted the success of its “Brand Match” pricing promotion, own-label food ranges and market share gains in general merchandise areas.

    In June Sainsbury posted a 1.4 percent rise in underlying first-quarter sales. It will update on the second quarter on October 3.

    “We’re not trying to set the industry alight; we’re trying to all the time consistently outperform by consistently executing,” Coupe said, adding, “we feel pretty good about where we are.”

    Sainsbury’s sales grew 3.8 percent in the 12 weeks to September 2, while its UK grocery market share edged up to 16.4 percent, market researcher Kantar Worldpanel said on Tuesday.

    Shares of the company, up 16 percent over the last year, closed at 332 pence, valuing the business at about 6.23 billion pounds.

    Follow Reuters Summits on Twitter @Reuters_Summits

    ($1 = 0.6211 British pounds)

    Reporting by James Davey and Neil Maidment; Editing by Steve Orlofsky

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