Sainsbury’s to invest in own-brand after record Christmas

Sainsbury’s is to overhaul its eponymous own-brand products this year as it seeks to build on its record Christmas, when it nudge ahead of Asda in market share for the first time in seven years.

Chief executive Justin King said the Sainsbury’s brand makes up about 80% of its own-label sales. The grocer will “work through category by category this year” to relaunch all the lines.

The revamp comes after Sainsbury’s reported like-for-like sales in its third quarter to January 8 up 3.6% excluding petrol. Some 0.9% of the figure was from store extensions and 0.8% was VAT.

Total sales for the third quarter were up 6% excluding petrol and two-year like-for-like growth is 7.4%.

Sainsbury’s also emerged as the Christmas winner according to Kantar data, and was the only one of the big four to increase its share. In the 12 weeks to December 26 its share increased from 16.3% to 16.6%.

Market leader Tesco maintained its share of 30.5%. Both Asda and Morrisons, however, experienced small drops in share of 0.1%.

Sainsbury’s overtook Asda as Britain’s second biggest grocer by market share in the four weeks to Christmas. It recorded a 16.6% share, compared with Asda’s 16.5%.

But King warned that the proposed retail levy in Scotland would result in a 50% hike in its business rates bill, and would have meant Sainsbury’s would “think twice” about investing there. The proposal by Scottish ministers is designed to raise an extra £30m in business tax rates through the levy.

Rival Morrisons reported like-for-like sales in the six weeks to January 2 up 1%, while Tesco was due to report its Christmas figures as Retail Week went to press.

Morrisons chief executive Dalton Philips insisted the grocer had not lost momentum and said the Kantar figures are “a reflection of new space”.

Tesco has also appointed a new management team making up the newly created UK board under Richard Brasher, alongside Bob Robbins’ as UK chief operating officer (Retail Week, last week). Per Bank, currently chief executive in Hungary, joins as commercial director for food, Laura Wade-Gery, current boss of Tesco.com, takes control of the UK non-food operation, and Tesco China boss Ken Towle comes back to the UK as director of internet retailing.