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Retail

Sainsbury's Sales Growth Driven By Convenience And Online

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Sainsbury's Sales Growth Driven By Convenience And Online

J Sainsbury, Britain's third-biggest grocer, met forecasts with a pick-up in quarterly sales driven by growth at local convenience stores and online, outperforming rivals including market leader Tesco.

The group, which trails Tesco and No. 2 player Wal-Mart's Asda by annual revenue, said today sales at stores open over a year rose 2%, excluding fuel, in the 16 weeks to September 28, its fiscal second quarter.

Tesco also released quarterly figures this morning and reported a 23.5% drop in profits for the first half of its financial year.

Sainsbury's online grocery sales rose by more than 15% in its second quarter, now channeling £1 billion, while convenience store sales rose 20%.

The performance was also driven by sales of its own-brand food and clothing range Tu. Sales of Taste the Difference and By Sainsbury's own-label food grew at more than twice the rate of branded food.

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But Sainsbury's chief executive Justin King said the market remained tough despite "some encouraging" signs for the UK economy as a whole.

The outcome, a 35th consecutive quarter of underlying sales growth, compares with analysts' forecasts of a rise of 1.5-2.8% and first quarter growth of 0.8%. Over the second quarter, Sainsbury’s opened 31 convenience stores and five new supermarkets, adding 307,000 sq ft to its estate.

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