Sainsbury's steams ahead after Christmas cracker

Sainsbury's had such a good Christmas that it's apparently overtaken Asda again. So why is it winning back market share?

by James Taylor
Last Updated: 19 Aug 2013
Sainsbury's seems to have played a blinder this Christmas: the supermarket said today that like-for-like sales were up 3.6% for the 14 weeks to January 8. That comfortably outstrips Morrisons - and according to reports of the latest market share data, it has also climbed back above Asda to become the UK's second-largest supermarket again. That's another feather in the cap of CEO Justin King, who was today trumpeting notable successes in food and non-food, as well as the creation of thousands of new jobs. And not a single moan about the snow, either...

Sainsbury's said that it enjoyed a record festive season, serving no fewer than 24.5m customers in the week leading up to Christmas Eve - despite the rotten weather. Thankfully, since it recently spent £1m re-launching the Taste for Difference range, customers were willing to splash out on pricier items: apparently free-range turkeys and smoked salmon were flying off the shelves. At the same time, we're spending more on its non-food offering - this grew at three times the rate of food, with clothing and electricals doing particularly well. It also opened 700,000 sq ft of new retail space, partly as a result of which it was able to create 6,000 new jobs.

Under King's leadership, Sainsbury's also seems to have inched past another psychologically important milestone. According to the latest market share figures from Kantar Worldpanel, Sainsbury's now has a 16.6% share - and although the figures aren't publicly released, the Times reports that Asda has fallen back to 16.5%. That would mean Sainsbury's has reclaimed the second place spot from Asda (Tesco is still way ahead in first place), for the first time in seven years. An Asda spokesman sniffily told the Times that it was hardly surprising, given that Sainsbury's has 500 more shops - but it's still testament to the success of King's turnaround plan.

Is this as good as it gets for Sainsbury's? Some investors seem to think so, judging by the number that have apparently decided to bank some profit by selling their shares this morning (pushing the share price down more than 2%, counter-intuitively). But although King remains wary of the 'challenging consumer environment', courtesy of tax hikes and job uncertainty, he insists Sainsbury's 'universal consumer appeal' leaves it 'well placed to make continued good process in 2011'. And on the evidence of this Christmas, who are we to doubt him?

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