Sainsbury’s has reported a 0.2% rise in like-for-like sales in its first quarterly results for 2018, driven by healthy sales growth in its Local convenience stores and online business.
The supermarket chain posted total grocery sales growth of 0.5% in the 16 weeks to 30 June, with online and convenience sales up 7.3% and 3.6% respectively.
Sainsbury’s opened one new Local store during the quarter and experienced its biggest ever sales week in convenience during the same 16-week period.
The chain now has 37 online collection points in its convenience stores where customers can collect Argos, DPD parcel delivery, eBay and Tu clothing products.
Sainsbury’s group ceo Mike Coupe said: “I am pleased with our progress in the quarter. The headline numbers reflect the level of price reductions we have made in key areas like fresh meat, fruit and vegetables since March. Our price position has improved and customers have responded well, resulting in a continuation of the improved volume trend we saw in the second half of last financial year.
“The market remains competitive. However, we have the right strategy in place and our proposal to combine Sainsbury’s and Asda will create a dynamic new player in UK retail, with the scale to give customers more of what they want today and create a more resilient and adaptable business for the future. We have successfully agreed a financing package of £3.5bn in relation to the proposed combination. The financing has been raised on attractive terms, reflecting the confidence of the lending banks in the outlook for the proposed combined business.”
Commenting on the results, Catherine Shuttleworth, ceo of retail marketing agency Savvy, said: “Today’s Sainsbury’s results show that challenges to their operating model continue in a fiercely competitive market. As the discounters ramp up their store opening programme across the South East, shoppers are starting to split their baskets which will be having an inevitable impact on Sainsbury’s performance. Reductions in the pricing of fresh fruit, meat and veg earlier this year demonstrate Sainsbury’s focus on remaining competitive.”
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