Sainsbury's beats expectations with 1.9pc sales growth

RELATED QUOTES

SymbolPriceChange
SBRY.L319.80-0.70
WMT78.04+0.48
TSCO.L297.35+4.95

Sainsbury's (LSE: SBRY.L - news) has posted better than expected quarterly sales growth on the back of its own-brand products and the launch of smaller convenience stores.

The country's third largest retailer, behind Tesco (LSE: TSCO.L - news) and Asda (NYSE: WMT - news), said in a trading update this morning that like-for-like sales excluding fuel were up 1.9pc in the second quarter of the year. That beats analysts' expectations of a 1.4pc rise.

Total sales, which includes income from shops that had not been opened by this time last year, were up over the same period by 4.3pc, or 4.4pc excluding fuel.

Justin King, chief executive, said that Sainsbury's had outperformed the market during a "unique and special summer", including the Jubilee celebrations, the Olympic and Paralympic Games and a period of unseasonably wet weather.

"We are seeing the benefit of our ongoing investment in our own-label ranges, particularly by Sainsbury's, which is growing at its strongest rate in recent years, and our Taste The Difference range, which is seeing near double-digit growth. Our own label penetration is increasing at a faster rate than any of the major supermarkets; a testament to the investment we have made in the quality of our products," he said.

"We expect the challenging economic backdrop to persist, but by helping our customers to Live Well For Less through competitive pricing, targeted promotions, quality own label products, and outstanding customer service, we are positioned to perform well coming into the important Christmas period."

Britain’s biggest retailer, Tesco, reported its first fall in profits since 1994 this morning due to a slowdown in sales in the UK and the cost of a £1bn turnaround plan to halt that decline.