Sainsburys reports strong fourth quarter sales

Benefiting from a successful multi-channel strategy, Sainsburys has posted encouraging fourth quarter results.

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19 March 2013

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UK grocer Sainsburys has increased market share and outperformed the market in its fourth financial quarter despite facing a continued "tough retail environment".

The supermarket chain announced total sales rose by 7.1% (6.3% excluding fuel) in the 10 weeks to 16 March 2013. Like-for-like sales for the group’s fourth quarter were also up 4.2% (3.6% excluding fuel).

In further good news for the retailer, like-for-like sales for the year increased 2.1% ( or 1.8% excluding fuel). 

What’s more, weekly customer transactions increased by over 800,000 year-on-year. The retailer likewise managed to achieve its target of approximately 5% gross space growth for the year.

Justin King, chief executive, said: "We have delivered strong sales in the fourth quarter, increasing market share and outperforming in what remains a tough retail environment. Over the quarter, we grew customer transactions to 22.9m per week, serving more customers than ever. Valentine’s Day and Mother’s Day were both particularly strong this year, and we closed the quarter with a very successful Red Nose Day, presenting a record cheque for £10.5m on behalf of customers and colleagues.

"Our focus on quality is an important reason why customers choose to shop with us, and why we are seeing strong growth in our own-brand products. With the re-launch of the By Sainsbury’s range almost complete, sales have grown by around 9% year-on-year. Our differentiated own-brand offer is complemented by the price reassurance of Brand Match on branded products.

"We have invested heavily in our supply chain and sourcing credentials over many years, including initiatives such as our Farmer Development Groups. Our fresh chicken has been 100% British since 2003, all of our fresh beef is sourced from the UK and Ireland and we have routinely carried out DNA testing on our products for over ten years. Our values are a long-term, strategic point of difference. The issues experienced by the industry over the last quarter underscore the importance of our detailed understanding of our supply chain.

"Our multi-channel strategy continues to enable customers to shop when and how they want. Our convenience business is growing at over 18% year-on-year, driven by a combination of new space and strong like-for-like sales growth. Groceries online increased sales by nearly 20% year-on-year. We now regularly serve over 190,000 customers a week with customer service and availability scores at an all time high. We were particularly proud of our performance and the dedication of our colleagues during the periods of heavy snow in January.

"Our general merchandise and clothing business is growing at nearly three times the rate of food. In February, we reached the milestone of £1bn annual sales from general merchandise, reflecting the investment we have made in the quality of our offer. Nearly 33% of our customers are now within a 15 minute drive of a full non-food offer, up from 29% this time last year. We saw our best ever January sale, with sales up 19% year-on-year, and we have continued to see strong growth in clothing at nearly 20% year-on-year, and home accessories nearly 25% year-on-year.

"In the quarter, we added 163,000 square feet of new space, comprising three supermarkets and 19 convenience stores. Over the full year, we have added 14 supermarkets, eight extensions and 87 convenience stores, bringing our total gross new space to just over 1 million square feet, an increase of approximately 5%, in line with our target. We also opened a new depot in Thameside, dedicated solely for our growing convenience business in London and the South East.

"We expect the challenging economic environment to continue through the coming year. By helping our customers to "Live Well for Less" through our ongoing commitment to great quality own-brand products, Brand Match, competitive pricing and targeted promotions via Nectar and coupon-at-till, we are well positioned to continue to outperform the market."

 

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