Tesco sales pressurise Sainsbury
Tuesday 21 January 1997
Tesco said in the 21 weeks to 5 January total sales growth was 13 per cent with like-for-like sales 8 per cent ahead. In the five weeks covering the Christmas and New Year period, like-for-like sales were 7.5 per cent ahead of the same period last year. The figures were ahead of the industry average of 5.9 per cent and analysts will be looking ahead to Friday when Sainsbury releases its Christmas trading statement.
Bill Myers at Henderson Crosthwaite said: "At first glance the market will obviously think that if Tesco is doing well then they must be hurting somebody and that that somebody is Sainsbury. I think Sainsbury's figures will probably be OK, but not as good as Tesco's."
Tony MacNeary of NatWest Securities said: "These figures put pressure on Sainsbury to come up with something good on Friday. They need to be better than 3 per cent. Even 4 per cent would only be stopping the rot."
Separately, Budgens reported a 4.5 per cent increase in like-for-like sales yesterday and chief executive John von Spreckelsen said the additional market share was coming from the smaller independent retailers as well as some of the middle-ranking supermarket groups. These include Iceland, Kwik Save and the Co-Op movement.
Tesco's sales increase was boosted by its "unbeatable value" promotion launched in September. The number of customers has increased and holders of the group's Clubcard loyalty card have been spending more per store visit. Tesco said Clubcard members had received pounds 56m worth of money-off vouchers in November.
Lord MacLaurin, chairman, would not be drawn on profits but said he looked forward to reporting "a good set of results in April". Tesco's figures helped the shares 2p higher at 369p while Sainsbury drifted 5.5p lower at 391p.
Somerfield, the former Gateway Foodmarkets group, will report today on its first full trading period since its troubled stock market quote last summer.
NatWest Securities is expecting Somerfield half-year profits of pounds 54.5m. Though the price of Somerfield shares was twice cut to ensure the float got away they have been strong recently and closed at a peak of 174p yesterday.
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