Sainsbury’s has said that own-brand sales are driving its business and are a key strength in its fight against rivals.
Sainsbury’s reported total sales for its first quarter for the 12 weeks to June 8 excluding petrol were up 3.3% and chief executive Justin King said those sales came solely from its relaunched By Sainsbury’s range and its top end offer Taste the Difference. He said everything else was “roughly flat”.
In the quarter, By Sainsbury’s sales were up nearly 7% and Taste the Difference is growing at over 10% and has now reached £1bn of sales.
“Own label is a key point of difference for us and the ranges also help customers to trade out of brands they might buy elsewhere and spend less without compromising on quality,” said King.
Sainsbury’s reported like-for-like sales for the first quarter excluding petrol up 0.7%, representing the slowest rate of growth for eight years.
King said it was a “solid performance” in a “tough consumer outlook” but argued that Sainsbury’s would “continue to outperform the market”.
He added: “We were the only major grocer to grow market share in the first quarter and we will continue to outperform by helping our customers with the market challenges.”
Last week rival Tesco reported first quarter like-for-likes excluding VAT and petrol down 1%.
He said despite the signs of some green shoots “there is no expectation that customers having a bit more money will make them behave like they did in 2006”.
He said: “Customers won’t go back to living beyond their means and we would not encourage that. That’s why we will continue with campaigns such as Love your leftovers and help customers to waste less.”
King reiterated that the Government should work towards a level playing field in terms of tax for retailers. He said bricks and mortar retailers were at a tax disadvantage to online only retailers because of business rates and this issue needs to be addressed.
In the quarter, Sainsbury’s reported non-food growing at over twice the rate of food, while convenience sales were up 20% year-on-year and online is growing at over 16% year-on-year.