Sainsbury outperforms rival supermarkets in first quarter - UPDATE

12th Jun 2013 07:00

As expected, supermarket giant Sainsbury has delivered its 34th straight quarter of like-for-like (LFL) sales growth, as its continued growth in market share helped it to outperform its competitors in the first three months of the year.Total sales in the firm's first quarter ended June 8th rose 3.6% (+3.3% excluding fuel) with strong growth seen in its own higher-priced brand, Taste the Difference, which grew sales over 10% to £1.0bn for the first time.The supermarket, which remains number three in the UK behind larger rivals Tesco and Asda, said that it is the only major grocer currently growing market share, which rose 0.2 percentage points to 16.8%.LFL sales in the 12 week-period rose more or less in line with market forecasts by 0.7%, (+0.8% excluding fuel). This compared to a 1.0% decline in LFL sales at Tesco and a 1.8% drop at Morrison in their respective first quarters (though these were for different trading periods).However, this represented a sharp decline from the 3.6% LFL growth enjoyed in the fourth quarter of the preceding year as the company had to deal with tough comparatives, specifically the Queen's Diamond Jubilee bank holiday which boosted sales in 2012.The market reaction to the update on Wednesday morning was rather mixed, with shares swinging between gains and losses early on. By 10:00, the stock was down 0.22% at 361.9p.Nevertheless, Sainsbury celebrated the performance of its non-food divisions, which continued to grow at over twice the rate of food. The firm said that strong sales were seen in homeware, with kitchen electricals up 34% year-on-year and cookware up nearly 23%.Meanwhile, convenience stores also remain a strong driver of growth with sales nearly 20% higher than last year. The firm opened 19 convenience stores over the quarter, refurbished a further 13 and said it is on track to deliver around two new stores per week for the year. Along with a newly opened supermarket and the refurbishment of a further six, 82,000 square feet of space was added to the Sainsbury estate, which contributed 0.2% of the growth seen in group LFL sales."This has been a solid performance in what continues to be a tough consumer environment," said Chief Executive Justin King."During the quarter we lapped some of our strongest performance of last year, culminating in the Queen's Diamond Jubilee, and have extended our track record to 34 quarters of LFL growth."