Trading 'toughest in 30 years' – Sainsbury's boss

Sainsbury's had robust performances from its clothing and homewares ranges and convenience stores to thank for an improvement in its first-quarter sales, although these were lower than City forecasts.

The UK's third-biggest grocer was boosted by the warm weather and royal wedding over the period, but Justin King, Sainsbury's chief executive, warned that trading conditions were the toughest he had seen in nearly three decades in the grocery sector.

Mr King's comments came a day after Tesco blamed a 4.8 per cent fall in quarterly non-food sales, such as electricals, clothing and entertainment categories, for a 0.1 per cent decline in UK like-for-like sales.



But Mr King said Sainsbury's – whose general merchandise offer is dwarfed by Tesco's – was "outperforming the market on non-food by some margin", citing the "success" of its Tu clothing range and home-related products. Its home accessories enjoyed record sales for a non-Christmas week leading up to Mother's Day, while clothing sales benefited from a television-advertising campaign and the warm weather.



But Mr King said: "The backdrop for non-food has never been more challenging", as "prudent" customers limit their discretionary spending in the wake of high energy bills and petrol prices, with prices at the pumps hitting weekly household budgets by £15 in the past two years.





Sainsbury's general merchandise business, which has benefited from its store-extension programme, continued to grow ahead of its food division in the last quarter, albeit at a slower rate than previously. For the 12 weeks to 11 June, Sainsbury's grew its like-for-like sales by 1.9 per cent, excluding fuel. This was ahead of the 1 per cent growth in the fourth quarter but behind City forecasts of 2.1 per cent. Accounting for the boost to its sales from store extensions and the VAT rise in January, Sainsbury's sales showed no growth during the period.

Lifted by weekly transactions up by 5 per cent to 22 million, total sales at Sainsbury's rose by 7.3 per cent, although fuel accounted for 3 per cent.

Sales at its 440 Sainsbury's Local convenience stores, were between "two to three times" ahead of its other 530 supermarkets, said Mr King, as customers cut back on car journeys and engage in top-up shopping.

In the run-up to the royal wedding, Sainsbury's sold 300 miles of bunting, 159,000 flags, and 49,000 mugs. Sainsbury's Basics range, which generates annual sales of £500m, has become the second-biggest value range with a 22.3 per cent market share, according to Kantar Worldpanel, for the 12 weeks to 15 May. While it has leapfrogged Asda's Smart Price range, Basics still lags behind Tesco. Mr King said that Sainsbury's premium brand, Taste the Difference, also grew sales, showing that customer are still prepared to treat themselves.

On consumer spending, Mr King said that confidence continues to "bump along the bottom" at a similar level to the past three years. He said: "I have been doing grocery for 28 years and it is the toughest it has ever been."

News
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Sport
sportDidier Drogba returns to Chelsea on one-year deal
Arts and Entertainment
The Secret Cinema performance of Back to the Future has been cancelled again
film
News
people
PROMOTED VIDEO
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
Sport
Louis van Gaal would have been impressed with Darren Fletcher’s performance against LA Galaxy during Manchester United’s 7-0 victory
football
Voices
The new dawn heralded by George Osborne has yet to rise
voicesJames Moore: As the Tories rub their hands together, the average voter will be asking why they're not getting a piece of the action
Sport
Dejan Lovren celebrates scoring for Southampton although the goal was later credited to Adam Lallana
sport
News
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Arts and Entertainment
Jo Brand says she's mellowed a lot
tvJo Brand says shows encourage people to laugh at the vulnerable
Life and Style
People may feel that they're procrastinating by watching TV in the evening
life
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Rhys Williams
commonwealth games
News
Isis fighters travel in a vehicle as they take part in a military parade along the streets of Syria's northern Raqqa province
i100
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Life and Style
fashionLatex dresses hit the catwalk to raise awareness for HIV and Aids
Travel
travel
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

The benefits of being in Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Test Analyst - UAT - Credit Risk

£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Finding the names for America’s shame: What happens to the immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert?

Finding the names for America’s shame

The immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert
Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears