Sainsbury expects Jubilee to boost grocery sector

(PA)

By James Thompson

Justin King, the chief executive of Sainsbury's, said yesterday he expects the grocery sector to get a major boost from street parties during the Queen's Diamond Jubilee in June.

He made his comments as the UK's third-biggest supermarket delivered an acceleration in underlying revenue growth in its fourth quarter, boosted by a surge in sales of its Basics and Taste the Difference premium ranges.

Mr King, who took charge at Sainsbury's eight years ago, expects a short-term boost to spending from this year's European Football Championship, Olympics and Paralympics, but forecast the biggest uplift from the extended four-day weekend of the Diamond Jubilee.

He said: "That week of the Diamond Jubilee – and particularly if there is good weather – there will be really strong events, and eating-out andstreet parties, so that will be the biggest."

Sainsbury's posted a growth of 2.6 per cent in like-for-like sales, excluding fuel, over the 10 weeks to 17 March, contributing to a 2.1 per cent rise over the full-year. Stripping out a 0.8 per cent boost from store extensions, the grocer's underlying sales rose by 1.8 per cent in the fourth quarter.

Mr King said: "It is definitely our strongest quarter of the last four and is a strong finish to the year." While he said there had been a "slight uptick in the market", he added: "we have kicked on ahead of our competitors".

However, he declined to call the end of the consumer downturn in the UK, adding: "I think that 2012 will be look very much like 2011."

Total sales at Sainsbury's rose by 5.1 per cent. Sales of its Basics rose by 10 per cent, while Taste the Difference grew by almost 20 per cent.

Mr King also said that the grocer's convenience stores, online grocery service and non-food units, such as its Tu clothing offer, are "all growing ahead of the market".

While annual profits at Tesco, which has operations in 14 countries, dwarf those of Sainsbury's, the market leader's UK underlying sales fell by2.3 per cent over its most recently reported period and have lagged behind its rivals over much of the past six years.

Mr King said: "Inevitably, you cannot be successful in the grocery sector if we are not doing our job for our customers and a better job than Tesco."

Speaking ahead of yesterday'sBudget, Mr King said the Chancellor George Osborne needed to "give confidence to consumers and business".

He added: "We have not had a consistent approach to policy on business in the last few years."

For instance, Mr King cited changes to the Government's carbon reduction policy relating to feed-in tariff subsidies, which were designed to provide rebates to companies that install solar panels on their roofs.