Sainsbury's boss calls for NI cut to reduce jobless and help recovery

The chief executive of Sainsbury's has urged the Chancellor to reduce the burden of national insurance to help boost job creation and the economic recovery.

Justin King, who took the helm in March 2004, also said he had no plans to step down in the next 12 months from Sainsbury's, as he unveiled a rise in half-year sales and profits ahead of its listed rivals, Morrisons and Tesco.

Ahead of the Chancellor's Autumn Statement next month, Mr King called national insurance a "tax on jobs".

He said: "Nothing does more for the health of the economy than having more people in jobs – it builds confidence, reduces the burden of unemployment on the state and increases retail expenditure. It is up to the Government to decide the best way to achieve it, but one option could be a national insurance holiday on new jobs for 12 months."

Sainsbury's, which has 1,063 stores, said it is creating 20,000 seasonal jobs over Christmas, with 2,000 of those hired expected to be kept on permanently.

Following recent speculation on his own role, Mr King said he had no plans to step down over the next 12 months.

He said: "I do understand why, when someone's been in a job for eight years successfully, people think they'd have on their mind doing something else, but I'm very happy at Sainsbury's."

Interim pre-tax profits at the grocer rose by 5.4 per cent to £373m over the 28 weeks to 29 September, as total sales rose 4 per cent to £13.37bn.

Mr King said it had outperformed the grocery market, boosted by its sponsorship of the Paralympics and strong growth at its smaller convenience stores, online grocery operation and general merchandise business.

While it remains less profitable than Morrisons and Tesco in the UK, Sainsbury's underlying sales rose by 1.7 per cent in its first half, capping 31 consecutive quarters of growth.

Mr King said: "We represent nearly all of the growth in the market. We have the fastest level of growth of any of our competitors."

Sainsbury's underlying sales in the second quarter rose by 1.9 per cent, beating rivals Morrisons, which saw a 2.1 per cent fall, and the market leader Tesco, which recorded just 0.1per cent growth.

Neil Saunders, the managing director of the retail consultancy Conlumino, said: "Sainsbury's continues to successfully steer between delivering good-quality food and promoting compelling, value-for-money messages. Charting such a course sounds easy in theory but, as both Tesco and more recently Morrisons have found to their cost, it is difficult to execute well."

Mr King also hailed the contribution from its "brand match" price initiative, which gives customers a money-off coupon at the till if the branded products in their basket would have been cheaper at Tesco and Asda.

During the half year, Sainsbury's opened five supermarkets and 49 convenience stores and extended three stores.