Sainsbury's sales driven by Jubilee spending

The grocer reported a 3.6% rise in total sales in the 12 weeks to June 9 aided by a 20% increase in online sales and a “strong” performance in the run up to the royal celebrations.

Tesco said on Monday that it had achieved £1bn of sales in the run up to the Diamond Jubilee weekend not contained within its reported figures.

Sainsbury’s opened 21 convenience stores in the quarter and saw a 16% rise in sales through the channel. The grocer refurbished eight stores and extended another over the quarter.

Sainsbury’s chief executive Justin King said: “We have delivered good sales growth in the quarter, in line with our expectations, helping our customers to manage both their weekly budgets, and to celebrate special occasions.

“Customers continued the habit of savvy shopping to save money in order to be able to treat themselves on special occasions, shown by strong sales in the lead up to the Jubilee celebrations. Just as in 2011, the quarter was characterised by five bank holidays, a royal event and periods of unseasonal weather.”

The company said clothing and general merchandise performance was strong, driven by sales of its fourth collection of its Gok for TU womenswear range.

The relaunch of its by Sainsbury’s own label range is now 75% complete. Some 70% of the products are new or redeveloped.

The retailer said two year like-for-like sales growth is at 3.3%.

King added: “We are gaining market share in our core general merchandise and clothing categories. Non-food continues to grow faster than food, and the quarter saw the strongest ever sales week on clothing.

“Our online business grew by over 20%, with an improved website enabling customers to order easily from handheld devices while on the move. Looking forward, we expect the market to remain competitive.

“Universal appeal, supported by market leading own label ranges, Brand Match and loyalty insight, ensures we help our customers to Live Well for Less. We remain well placed to continue to outperform the market.”

Shore Capital analyst Clive Black said: “Sainsbury did continue to outperform the market and its same store sales are around 3% ahead of its key competitor Tesco UK. However, Sainsbury’s differential over Tesco may be starting to narrow and it is noteworthy that this statement included The Queen’s Diamond Jubilee, whereas Tesco’s did not albeit Sainsbury states that it had strong sales in the lead up to the Jubilee celebrations.

“Sainsbury’s has completed three-quarters of the re-launch of its mainstream private label under the by Sainsbury banner. Such work can said to have supported trade but it may be increasingly needed as Tesco and Morrison commence private label range reviews. Put another way, has Sainsbury enjoyed the peak benefit of its range modernisation already?”

Sainsbury’s has attributed much of its strong performance in the last six months to its Brand Match coupon at till initiative. Retail-Week.com revealed yesterday that Morrisons is trialling a similar initiative in the North East.