Blog: Dean BestSainsbury's looks to an "own-label Christmas"

Dean Best | 13 November 2013

Sainsbury's today (13 November) reported another set of solid results, with its private-label food a factor in higher half-year sales and profits. And chief executive Justin King, talking to reporters this afternoon, said own label will be a key battleground in the coming festive period.

The UK grocer said pre-tax profits for the 28 weeks to 28 September were up 9% and reported its highest share of the UK grocery market for a decade.

The retailer said own-label sales were growing "at over twice the rate" of branded goods. Its By Sainsbury's standard own-label range saw sales increase 6% year-on-year; sales of its more premium Taste the Difference range were up at a "double-digit" rate. Sainsbury's said annual sales of Taste the Difference had reached GBP1bn.

Sainsbury's entry-level Basics range was a fly in the ointment, with sales falling. The retailer is moving to relaunch the range and insisted its recent performance was more a reflection of the recent work on By Sainsbury's than the impact of moves from competitors on their own cut-price own label.

However, Sainsbury's is proud of its own-label ranges - they are, of course, a key part of its battle against Tesco's price comparison scheme - and King said Christmas would be a time when private labels would come to the fore.

"We think it will be an own-label Christmas," King said. "The savvy shopper wants quality but doesn't want to spend any more than is necessary."

And that prediction is, King indicated, based on Sainsbury's view of consumer confidence in the UK.

King acknowledged economic data, including yesterday's news of slowing inflation, was "undoubtedly good news" but he cautioned against drawing conclusions about changes in consumer behaviour.

"The reality for consumers is they're not seeing more money in their pocket," he said. "Consumers are under more pressure than they were 12 months ago."

However, let's round off on a more cheery note. Sainsbury's is set to launch its Christmas ad - and it is rather good.

The retailer has worked with director Kevin Macdonald - the man behind the film Life in a Day - to create an ad based on real footage from over 100 UK families.

A three-and-a-half minute version will air tonight in the UK before a 50-minute film will launch at a London cinema later this month.

Click here to watch the trailer. It will get even the most Scrooge-like among you in a festive mood.

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