Stores sales boost makes Sainsbury's taste better

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The Independent Online

Refurbished stores at J Sainsbury's have experienced a 12 per cent sales rise, a figure that is expected to contribute to improved sales figures in the supermarket group's fourth-quarter trading statement released on Friday.

The group is carrying out a "re-invigoration" programme to gain ground on its arch rival, Tesco. Sainsbury is to refurbish all of its stores and increase product ranges with items such as electrical goods, home furnishings and Early Learning Centres.

A spokesperson said about 131 stores out of a total of 460 have been refurbished so far. Refurbished stores attract a burst of customer interest, but the good figures cover trading when it has become steadier, the spokesperson said.

Analysts are expecting Sainsbury to taste a little better on Friday with ING Barings predicting that like-for- like fourth-quarter sales will be up around 5 per cent. If petrol sales are excluded, the figure is 5.5 per cent.

Clive Black, an ING Barings analyst, said it was unlikely the group's sales would maintain 12 per cent growth, once all the stores were refurbished. He estimated year-on-year sales to improve by about 6 per cent, when newly built stores are taken into account.

Sainsbury's trading statement is awaited eagerly, as Tesco reports full-year results on Wednesday, and the two sets of figures will be compared to see who is winning customers from whom.

"We suspect Tesco could be losing a little market share to Sainsbury [in the UK], and await the release of its quarter four trading statement next week," said research from JP Morgan. It predicts Tesco's fourth-quarter UK sales growth will be around 4.6 per cent. Tesco is also refurbishing its stores, although the effects will probably be felt in 2003, said JP Morgan.