Posting its ninth consecutive quarter of sales growth in the second year of the company’s turnaround plan, UK retailer Sainsbury’s today (28 March) said that it had “no reason” to update the market on a potential takeover bid from private equity or trade groups.
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The supermarket group posted like-for-like sales growth of 5.9%, excluding petrol, while total sales, excluding petrol, rose 7.8%. As part of the supermarket’s turnaround plan, Sainsbury’s annual like-for-like sales must grow by 3.5%, to hit the company final revenue target of GBP2.5bn (US$4.91bn).
“We are committed to delivering the Making Sainsbury’s Great Again recovery plan… and believe this strategy is delivering substantial value for our shareholders. As we enter the third year of the plan, we are confident that we can continue to build upon this recovery,” chief executive Justin King commented.
Sainsbury’s said sales from new and refurbished stores surpassed expectations. The company opened five new supermarkets during the period, refurbished 11 supermarkets and opened five convenience stores.
“Our store extensions, new stores and refurbishments performed strongly during the quarter, exceeding our sales expectations,” King said
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By GlobalDataSainsbury’s said that sales were boosted by a strong performance during Comic Relief’s Red Nose Day, Mother’s Day and Valentine’s Day. The company, the UK’s largest retailer of fairtrade goods, added that fairtrade sales were becoming “increasingly important”. Fairtrade sales were up 50% over the period, boosted by a 150% increase during fairtrade fortnight at the beginning of March.
However, the positive results were announced in the shadow of a potential bid for the UK’s third largest supermarket operator. At the beginning of February, a private consortium consisting of CVC Capital, Kohlberg Kravis Roberts, Blackstone and Texas Pacific Group announced that it was evaluating the possibility of a takeover bid for the retailer. The syndicate has until 13 April to make a firm offer. Further rumours have linked Asda, the UK unit of Wal-Mart, with a potential move on the chain.
During a conference call today King said that it was the board’s duty to keep investors up-to-date on any information pertaining to company ownership, adding that he currently had “no reason” to make any announcements. King declined to comment on the rumoured interest from Adsa.
