Sainsbury's to push on with store openings
Sainsbury's has insisted that – unlike its big rivals – its rapid store-opening programme will not hit its performance as it posted a 7 per cent jump in half-year profits.
The UK's big four grocers – Tesco, Asda, Sainsbury's and Morrisons – will add 19 million square feet of new space between 2010 and 2014, which City analysts feel is excessive in a sector where sales volumes are declining.
But Justin King, chief executive of Sainsbury's, which aims to add 1.4 million square feet of space in 2011-12, said its plan was more balanced – in terms of proportion of new supermarkets, convenience stores, extensions and rebadges of acquired shops – than its rivals'. He added it was also "massively" more weighted towards opening new stores away from its existing branches, thus minimising the prospect of sales cannibalisation.
Mr King said: "Over a third of our space is more than eight miles from an existing [Sainsbury's] supermarket."
For the 28 weeks to 1 October, the company's underlying pre-tax profits rose 6.6 per cent to £354m. Boosted by higher fuel prices, sales were up 7.6 per cent to £12.9bn. Mr King said: "We remain a nose ahead of our rivals."
While Sainsbury's like-for-like sales rose by 1.9 per cent, they were flat once the impact of store extensions and VAT is stripped out.
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