Like-for-like sales excluding fuel for the 12 weeks to June 14 were up 3.4 per cent, compared with a rise of 4.1 per cent in the previous three months. Total sales were up 4.5 per cent excluding fuel.
Sainsbury’s has enhanced its promotional offer, expanded its basics range and launched its Feed your Family for a Fiver campaign. The grocer said that non-food continues to grow strongly and online is performing well, with sales growth of more than 40 per cent.
“The challenging economic environment continued throughout the quarter,” said chief executive Justin King. “However, we are now serving nearly 18 million customers a week and have delivered sales growth in line with our expectations. Whilst we anticipate that the environment will remain challenging, we operate from a strong financial position and our expectations for the full year remain unchanged.”
During the quarter, Sainsbury’s opened four new supermarkets. Two supermarkets were extended and a further nine were refurbished. It also completed the sales of 22 out of the 36 convenience stores, which were announced for closure in March this year.
Blue Oar analyst Greg Lawless said trading is in line with expectations, but starting to disappoint. “With like-for-likes of only 3.4 per cent, inflation accounts for 3 per cent of the sales growth and extensions account for 0.6 per cent, so the underlying business is beginning to go backwards,” he said.
Lawless also pointed out that Qatari investor Delta Two is now free to bid at any price, following the passing of the June 15 deadline and “there are rumours that they could arrive back in town sometime soon”.