UK: Sainsbury sales growth slows in Q2
Slowdown in quarterly sales
Well positioned to cope with lower food inflation
Total sales rose 3.2%
UK retailer Sainsbury reported a slowdown in quarterly sales this morning (7 October) due to weakening food inflation.
Like-for-like sales for the second quarter - excluding fuel and VAT sales tax - rose 5.4% in the 16 weeks to 3 October.
The result compared with a 7.8% gain in the first-quarter.
Total sales for the second quarter rose 3.2% for the period, or 6.8% excluding fuel.
However, Sainsbury's insisted it was well-positioned to cope with lower food inflation due to growth from its online grocery service and its expansion into non-food ranges.
"We expect market growth to slow in the coming months due to reduced inflation," CEO Justin King said.
He added: "The Sainsbury's brand continues to perform well in what remains a challenging consumer environment. Our online food home delivery service saw sales growth of 20%. During the quarter we opened 12 convenience stores, bringing the total opened in the first half of the year to 19, and we are on track to achieve our target to open 50 additional convenience stores this year."
"While we expect market growth to slow in the coming months due to reduced inflation, the universal appeal of our focus on quality and value leaves us well positioned going forward."
Check back later for more comment from Sainsbury after the company's conference call with analysts. Click here for the full release.
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