Upmarket foodies boost Sainsbury's festive sales

Sainsbury's has hailed a "record" Christmas after the grocer delivered third-quarter sales ahead of City expectations, driven by a surge in customer transactions and hard-pressed customers treating themselves to champagne and premium turkeys.

The grocer also said growth at its convenience stores had outstripped its bigger supermarkets and that general merchandise sales continued to grow ahead of food, boosted by strong demand for its Tu womenswear designed by the TV celebrity Gok Wan.

Justin King, the chief executive, pointed out that unlike its listed grocery rivals, Tesco and Morrisons, it was reporting a full quarter, as opposed to just the "shorter, bouncier" Christmas period. Sainsbury's posted a 2.1 per cent rise in underlying sales, excluding petrol, over the 14 weeks to 7 January, which was ahead of City forecasts of a 2 per cent rise. But when the 0.9 per cent impact of VAT is stripped out, Sainsbury's underlying sales rose by a more modest 1.2 per cent.

Mr King said: "Quite clearly that result places us as the Christmas winner in grocery."

Morrisons posted sales growth of 0.7 per cent, excluding fuel and VAT, over the six weeks to 1 January.

Mr King said: "We are a good stretch ahead of Morrisons on any comparable basis," adding this was supported by recent industry data.

According to Kantar, Sainsbury's grew sales by 5.5 per cent over the 12 weeks to 25 December. This was ahead of the 3.3 per cent growth at Tesco and Morrisons' 5.1 per cent but behind Asda's 7.3 per cent, which appears to be back in the groove after its integration of the Netto stores it acquired.

Tesco is expected to confirm its status as the festive laggard of the big four grocers today by posting UK underlying sales down by up to 2 per cent.

Sainsbury's said customers had traded up to "special products" over Christmas, with champagne sales up 10 per cent and its Taste the Difference items, such as its Norfolk Black Free Range turkeys, growing by a similar amount.

The grocer's Basics value range also "grew strongly", showing how shoppers were managing their budgets tightly. Total sales rose by 4.5 per cent, excluding fuel, driven by a 1.5 million rise in customer transactions to a record 26 million over the seven days to 24 December.