Delivering its first quarter results, UK retailer Sainsbury’s revealed that its like-for-like sales growth has slowed over the past three months.
Like-for-like sales, excluding fuel, increased by 3.4% in the three months to 14 June, compared to an increase of 4.1% in the previous quarter.
Including fuel, like-for-like sales were up 7.3% thanks to the rising price of petrol and diesel.
In what the company described as a “challenging economic environment” Sainsbury’s said that it had seen strong sales growth of its “basics” value-end own brand range.
“Our universal appeal provides customers with great quality products whatever their budget. We have enhanced our promotional offer, providing clear and simple deals for customers, further expanded our “basics” range which continues to show strong sales growth, and launched our ‘Feed your Family for a Fiver’ campaign,” CEO Justin King commented.
Sainsbury did not say how much of the sales growth can be attributed to volume growth and how much to price hikes.
“The majority of Sainsbury’s growth in the first quarter was inflation led,” Shore Capital’s Clive Black told just-food.
UK government inflation figures released yesterday showed food prices were up 8.7% year-on-year in May.
Sainsbury’s said that its online sales continued to grow, with sales increasing 40%, while Black observed that the group “is making reasonable progress in non-food”.
Looking to the remainder of the year, King was cautiously optimistic.
“Whilst we anticipate that the environment will remain challenging, we operate from a strong financial position,” he commented.