Sainsbury's reveals boost in sales

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The Independent Online

Supermarket group Sainsbury's today posted a 5.4 rise in second quarter sales as it kept up the pressure on market leader Tesco.

The firm said it performed well in "what remains a challenging consumer environment" but it warned that growth would slow in the future as inflation eases.

Sainsbury's said it now makes over 18.5 million transactions a week, up 800,000 year-on-year. The like-for-like sales growth for the 16 weeks to October 3 excludes fuel and VAT.

Sainsbury's has seen its same-store sales growth slow from 7.8 in the first quarter. Total sales excluding fuel grew 6.8 in the last three months, compared with 7.6 earlier in the year.

This was despite the addition of 19 new supermarkets - 14 acquired from Somerfield and Co-operative - and 12 new convenience stores in the period.

The firm opened a total of 24 supermarkets in the first half and said these were performing ahead of expectations.

Openings included a 71,000 sq ft store in High Wycombe, the second of its stores with a mezzanine level, and a 68,000 sq ft store in West Belfast, the largest Sainsbury's in Northern Ireland.

Sainsbury's is still a long way behind Tesco in terms of market share, with 15.8 of the grocery sector in September compared with its larger rival's 30.9, according to TNS Worldpanel.

But it has outstripped Tesco in terms of sales growth in recent months, albeit from a much lower base.

Yesterday Tesco said its like-for-like sales in the second quarter were up 3.1 on a VAT-adjusted basis.

Tesco said total UK sales including petrol and VAT rose 2.8 to £20.7 billion in the first half to the end of August.

Sainsbury's raised £432 million earlier this year to help grow the business "further and faster".

The supermarket chain said it was on track to grow by 15 in the two years to March 2011, helping to create 10,000 new jobs.

The firm said openings in the second quarter meant it had added 1,500 new roles and it said it was on track to meet its target of 500 places on its apprenticeship scheme for butchers, bakers and fishmongers.

Justin King, chief executive, said the supermarket's non-food offer was growing at nearly three times the rate of food.

Sainsbury's has been selling its TU clothing range for five years and Mr King said it was now "a well established and popular part of our offer".

"Our performance in the first half continues to show good progress as we also invest for the future.

"While we expect market growth to slow in the coming months due to reduced inflation, the universal appeal of our focus on quality and value leaves us well positioned going forward," he said.