Sainsbury's blows its own Vuvuzela

16th Jun 2010 07:05

Sainsbury's has outdone arch rival Tesco in the growth stakes with a 4.6% increase in like for like sales during the first quarter and is apparently doing a roaring trade in Vuvuzela horns.Britain's third largest supermarket said like for like sales excluding petrol increased by 1.1% during the 12 weeks to 12 June. Tesco yesterday reported UK like for like sales up 1.1% and just 0.1% without fuel.The firm, which boasts it's the number one retailer of British asparagus and Jersey Royals this season, said total sales jumped 7.6%, or 4.4% without petrol.Chief executive Justin King, who it's just been announced received an £8m pay out last year, said the online business hit new records, growing just under 20%, while the retailer now ranks as Britain's fastest growing DVD retailer."Our World Cup range is selling well and our Vuvuzela horns are a 'must have' item for football fans," King added. TV men have tried to ban fans at the football World Cup in South Africa from using the horns, which sound like a swarm of bees to television viewers. "We have made a good start to the financial year in line with our expectations," said King. "While we continue to expect the consumer environment to remain challenging, our universal customer appeal, unique loyalty offer and accelerated growth strategy mean we are well placed to make continued good progress."Ambrian is unmoved though. The broker is "not going to obsess about one quarter's sales growth, especially in an industry where all the main operators' performances have converged to within a fag paper of each other". "Everybody is in the same boat and no one is doing particularly well, or particularly badly," it told clients in a note today."Sainsbury has recovered well under Justin King, but it is not yet doing anything that is game changing. Perhaps it should. Until then, we value the shares at a narrow discount to underlying NAV."Jonathan Jackson over at Killik Capital likes the "attractive" 4.9% prospective dividend yield and the chance of renewed bid speculation at some stage.