Sales Increase Pushes Sainsbury Ahead of Rivals

Posted on 12 June, 2013 by MOVEHUT

Sainsbury will put rival supermarkets under more pressure today when it is expected to report a further increase in like-for-like sales.

Tesco, Britain’s largest retailer, reported a 1 per cent drop in like-for-like sales when it updated the market last week and Philip Clark, the chief executive, warned that his £1bn turnaround plan is taking time to take effect.

In contrast, the City expects Sainsbury’s to release its 34th consecutive quarter of like-for-like sales increase under the chief executive, Justin King.

Specialists at Sainsbury’s house broker, Morgan Stanley, have forecast that the supermarket will say like-for-like sales increased 0.6 per cent in the 12 weeks to June 8, although some specialists believe sales may have risen by as much as 3.5 per cent.

Growth of 0.6 per cent would be the supermarket’s slowest for more than three years. However Edouard Aubin, analyst at Morgan Stanley, said this would still demonstrate that Sainsbury’s was outperforming its rivals and any drop-off was due to the Queen’s Diamond Jubilee and an extra bank holiday falling in the same period in 2012.

He said: “While Q1 will likely mark Sainsbury’s softest like-for-like sales growth in over three years, we note that, unlike listed competitors Tesco and Morrisons, Sainsbury’s like-for-like sales remain in positive territory and that, quarter to date, Sainsbury’s has continued to gain market share

“Additionally, we note that Sainsbury’s outperformance was achieved despite limited promotional activity during the quarter.”

Mr King, who strongly denies speculation that he is preparing to step down, has breathed new life into Sainsbury’s since taking charge in 2004.

The retailer is enjoying exceptionally strong growth in non-food products, its Tu clothing range and own-brand food ranges.

It is also expected to venture into the commercial property market, once again,  by opening 50 new convenience stores in London and the South East this year.

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