Sainsbury surprises by smashing Christmas forecasts

Sales of clothes, toys and turkeys helped Sainsbury's to grab market share over the Christmas period.

Last Updated: 06 Nov 2012

Not wanting to be left out in the cold by fellow retailers’ stellar sales figures, Sainsbury’s boss Justin King today said the supermarket had delivered a ‘record performance’ during the Christmas period. Slightly to our surprise, Britain’s third biggest grocer has just unveiled a 4.2% increase in like-for-like sales in the 13 weeks to January 2, smashing analysts’ predictions of a 3.5% gain – thanks largely to the large volume of non-food items it shifted. Admittedly this is down a shade on its 5.2% growth in the second quarter, but this was mainly due to lower food price inflation. And it's even managed to increase its market share...

It’s been another three months of solid growth for Sainsbury’s, which saw a million extra customers per week pass through its tills. Many of these will have been attracted by the supermarket’s ‘coupon at till’ loyalty programme, introduced after rival Tesco doubled the points available through its Clubcard scheme. King reckons that the number of customers who bought their turkey and trimmings from the supermarket was an impressive 14% up on last year, although it was non-food items that really flew off the shelves: the supermarket flogged toys and clothes at more than four times the rate of food.

And despite claims at the end of last year that Sainsbury’s is losing custom to its rivals, the latest figures from research firm Nielsen suggest otherwise: Sainsbury’s steady uplift in sales helped the supermarket claw back market share by 2%, taking it to 14.7% for the 12 weeks to Boxing Day. This means that its growth is still lagging behind the sector’s current star turn Morrisons, as well as Asda, but King is likely to take comfort in the fact that Sainsbury’s is at least growing faster than market leader Tesco.  

Nor is King ready to rest on his laurels just yet. In fact, he struck a more upbeat tone about the year ahead than his counterparts at M&S and John Lewis (who both warned this week of a tough 2010). ‘Our universal customer appeal together with our accelerated growth plans means we are well placed to make continued good progress in 2010,’ King insisted. In light of M&S’s relatively lukewarm results yesterday – after which chairman Sir Stuart Rose admitted that its food offering had taken a pasting from Waitrose in recent months – we suspect incoming boss Marc Bolland might not be feeling quite so confident.

In today's bulletin:

Sainsbury surprises by smashing Christmas forecasts
Energy suppliers make hay while the snow falls
Microsoft and Google try to take a bite of Apple
Tomorrow's world: the new era of technology
Psychology at Work: Make your New Year resolutions stick

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