UK: Convenience, online boost Sainsbury's sales
By Michelle Russell | 19 March 2013
- Like-for-like sales up 4.2%
- Total sales climb 6.3%
Sainsbury said its convenience business is growing at over 18% year-on-year
UK retailer Sainsbury's has recorded an increase in like-for-like sales over the last ten weeks, helped by strong growth in online and convenience.
The grocer said today (19 March) it managed to deliver "strong" like-for-like sales growth of 4.2%, excluding fuel, in the period to 16 March, increasing market share and outperforming in what it said remains a tough retail environment.
Sainsbury said its convenience business is growing at over 18% year-on-year, driven by a combination of new space and strong like-for-like sales growth. Online grocery sales increased nearly 20% year-on-year.
The retailer also benefited from the success of its Brand Match pricing initiative, competitive pricing, own-brand sales growth and a push into non-food areas such as clothing, which it said is growing at nearly three times the rate of food.
Sainsbury's total sales in the quarter climbed 6.3%, excluding fuel.
Chief executive Justin King, said: "We expect the challenging economic environment to continue through the coming year ... we are well positioned to continue to outperform the market."
Fourth Quarter Trading Statement for 10 weeks to 16 March 2013
Strong sales, reflecting continued market outperformance
· Total sales for fourth quarter up 7.1 per cent (6.3 per cent excluding fuel)
· Like-for-like sales for fourth quarter up 4.2 per cent (3.6 per cent excluding fuel)
· Like-for-like sales for year up 2.1 per cent (1.8 per cent excluding fuel)
· Weekly customer transactions increased by over 800,000 year-on-year
· Achieved target of c.5% gross space growth for the year
Justin King, Chief Executive, said, “We have delivered strong sales in the fourth quarter, increasing market share and outperforming in what remains a tough retail environment. Over the quarter, we grew customer transactions to 22.9m per week, serving more customers than ever. Valentine’s Day and Mother’s Day were both particularly strong this year, and we closed the quarter with a very successful Red Nose Day, presenting a record cheque for £10.5m on behalf of customers and colleagues.
Our focus on quality is an important reason why customers choose to shop with us, and why we are seeing strong growth in our own-brand products. With the re-launch of the by Sainsbury’s range almost complete, sales have grown by around 9 per cent year-on-year. Our differentiated own-brand offer is complemented by the price reassurance of Brand Match on branded products.
We have invested heavily in our supply chain and sourcing credentials over many years, including initiatives such as our Farmer Development Groups. Our fresh chicken has been 100 per cent British since 2003, all of our fresh beef is sourced from the UK and Ireland and we have routinely carried out DNA testing on our products for over ten years. Our values are a long-term, strategic point of difference. The issues experienced by the industry over the last quarter underscore the importance of our detailed understanding of our supply chain.
Our multi-channel strategy continues to enable customers to shop when and how they want. Our convenience business is growing at over 18 per cent year-on-year, driven by a combination of new space and strong like-for-like sales growth. Groceries online increased sales by nearly 20 per cent year-on-year8. We now regularly serve over 190,000 customers a week with customer service and availability scores at an all time high. We were particularly proud of our performance and the dedication of our colleagues during the periods of heavy snow in January.
Our general merchandise and clothing business is growing at nearly three times the rate of food. In February, we reached the milestone of £1bn annual sales from general merchandise, reflecting the investment we have made in the quality of our offer. Nearly 33 per cent of our customers are now within a 15 minute drive of a full non-food offer, up from 29 per cent this time last year. We saw our best ever January sale, with sales up 19 per cent year-on-year, and we have continued to see strong growth in clothing at nearly 20 per cent year-on-year, and home accessories nearly 25 per cent year-on-year.
In the quarter, we added 163,000 square feet of new space, comprising three supermarkets and 19 convenience stores. Over the full year, we have added 14 supermarkets, eight extensions and 87 convenience stores, bringing our total gross new space to just over 1 million square feet, an increase of approximately 5 per cent, in line with our target. We also opened a new depot in Thameside, dedicated solely for our growing convenience business in London and the South East.
We expect the challenging economic environment to continue through the coming year. By helping our customers to Live Well for Less through our ongoing commitment to great quality own-brand products, Brand Match, competitive pricing and targeted promotions via Nectar and coupon-at-till, we are well positioned to continue to outperform the market.”
Original source: Sainsbury's
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