Sainsbury’s, Britain’s second-biggest supermarket group, saw its sales growth accelerate in its latest quarter, helped by inflation and a spate of warm weather, though it cautioned trading conditions remained tough.
Sainsbury’s and its major rivals — market leader Tesco, Asda and Morrisons — are grappling with the rapid growth of German discounters Aldi and Lidl, and having to deal with more expensive food imports due to the post-Brexit vote fall in the value of the pound.
“The market is competitive and we continue to manage cost price pressures closely,” chief executive Mike Coupe said.
Photo: Bloomberg
“Our strategy is delivering and we are well placed to navigate the external environment,” he said.
Sainsbury’s said group retail like-for-like sales rose 2.3 percent, excluding fuel, in the 16 weeks to July 1, its fiscal first quarter.
That compares with analysts’ average forecast of a rise of 2 percent and growth of 0.3 percent in the previous quarter.
This was the first quarter following the Home Retail purchase for which the group did not issue separate like-for-like sales data for Sainsbury’s and Argos.
Sainsbury’s said total grocery sales rose 3 percent, while transactions at the supermarket were up 1.9 percent.
General merchandise sales increased 1 percent
The group said online grocery sales increased 8 percent, while sales at convenience stores were up 10 percent.
Prior to yesterday’s update analysts were on average forecasting a pretax profit of ￡572 million (US$741 million) for 2017 to 2018, down from 581 million in 2016 to 2017. Such an outcome would represent a fourth straight year of profit decline.
Shares of Sainsbury’s, up 5 percent over the past year, closed on Monday at ￡2.49, valuing the business at 5.5 billion.
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