UK retailer Sainsbury said its like-for-like sales figures have been “very strong” versus its competitors, despite experiencing a slowdown in sales growth for the second quarter.
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Speaking at the company’s earnings conference call today (7 October), CEO Justin King said it is “bouncing up against tougher comparatives”, which makes things “tougher”, but that Sainsbury has to continue to outperform the market in the long-term.
“There might be a quarter where our like-for-like is behind the market but that wouldn’t be a matter for concern as long as our long-term trends continue in the right direction,” King told analysts.
“We’ve got 2.2% growth coming through from new space. That’s a new figure and that’s something we’ve been waiting for a long time and we continue to expect that to grow. And we’ll start to get a maturity dynamic in our mix as well.”
He added: “At any given time there’ll be some people you’re losing to and some people you’re switching from and we continue to have very positive net switching in total.”
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By GlobalDataSainsbury posted a 5.4% increase in like-for-like sales – excluding fuel and VAT sales tax – for the second quarter this morning.
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, King told analysts that while consumer sentiment is still “very very poor”, he is seeing signs of improvement.
“The last six to nine months were worst than have ever been on record. The curve is positive, but we have a long way to go before getting back to what we call normal consumer sentiment,” he said.
Asked about competition from the likes of Waitrose affecting sales figures, King said: “The pricing of Waitrose Essentials is equivalent to our core own label, and is largely a repackaging of an existing range, so it has clearly been very powerful for them.
“Waitrose is relatively small and a small part of the mix for us, in terms of who we can either win or lose business too. The biggest Waitrose factor in the next six to nine months is that they have added more space than anybody else with the Somerfield purchases. We welcome them as best we can as a competitor.”
