Sainsbury heralds bumper Xmas and claims to be grabbing market share
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Sainsbury’s sold a record number of pigs in blankets, mince pies and sparkling wine bottles over Christmas as it today reported a strong festive period that lays down a challenge to rivals.
It is holding profit guidance for the full year to March at between £670 million to £700 million, at which point the three-year plan from CEO Simon Roberts will be at an end and a new strategy will be unveiled in February.
Since Sainsbury claims to be taking market share from all the other large grocers, investors are likely to want to keep Roberts despite some rumblings about his pay of towards £5 million last year.
Sainsbury, which is one of the biggest private sector employers with 152,000 staff, has just put £200 million into the staff pay pot to ensure all get the real living wage.
Sales rose 9.3% in the third quarter and 8.6% over the Christmas period. That dip was down to falling inflation not lower volumes of sales, it insists.
It has a price promise on 550 essential products with Aldi, not quite as complete as Asda’s pledge to price match with both Aldi and Lidl.
The grocer says its Nectar card saved customers £16 on an average £80 shop over Christmas.
The shares dipped 16p, 5%, to 290p on some disappointment there wasn’t a further upgrade to profit forecasts.
John Coldham, co-chair of retail at the law firm, Gowling WLG said: “Given the increased pressure on the entire supermarket sector at the moment, it will be interesting to see how efforts from others intensify as the New Year race to gain more market share intensifies. Additionally, upward pressure from tougher border checks and new business rates loom this year, representing yet another practical challenge for the key players to contend with.”
Sainsbury saw general merchandise sales down 0.6% in the third quarter. Clothing sales fell 1.7%.
There remains some concern in the City that this part of the business is trailing the food arm.
Simon Roberts, the CEO, said: “We’ve worked hard to really deliver for our customers this quarter and have grown grocery volumes ahead of the market for the fourth Christmas in a row. More customers are choosing to shop at Sainsbury’s, recognising our determined focus on value, product innovation and service. This was our first Christmas powered by Nectar Prices, helping customers save an average of £16 on an £80 Christmas shop.”
He added: ” We took share from all our competitors. We really stepped up our game moving into Christmas. That drove switching in the market. We are serving morecustomers bigger baskets, that is why we are winning. We are growing volumes ahead of the big grocers and ahead of Aldi.”Clive Black at Shore Capital said: “Sainsbury’s Grocery business has been motoring very well under the ‘Food First’ strategy implemented by Chief Executive Officer Simon Roberts and his leadership team.”
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