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Sainsbury beat profits targets in Q4

Tuesday, March 19 11:32:39

J Sainsbury, Britain's third-biggest grocer, beat forecasts for underlying sales in its fourth quarter, with strong growth online and in convenience stores more than offsetting a weaker performance in its traditional outlets.

Online sales and convenience stores are the two fastest growing areas for Britain's supermarkets as shopping habits change, with consumers increasingly using the internet to shop and high fuel prices discouraging trips to town centres and out-of-town malls.

Sainsbury's, which trails by annual revenue market leader Tesco and Wal-Mart's Asda, said today its convenience store business was growing at over 18 percent year-on-year, driven by a combination of new selling space and like-for-like sales growth, while online grocery sales were increasing nearly 20 percent year-on-year.

Those channels drove a 3.6 percent rise in its like-for-like sales, excluding fuel, in the 10 weeks to March 16.

That was the 33rd consecutive quarter for underlying sales growth and compared with analysts' average forecast for a rise of 2.3 percent, and growth of 0.9 percent in the third quarter.

It was considerably ahead of a fourth-quarter like-for-like sales fall of 4.1 percent reported by fourth-ranked grocer Wm Morrison last week and analysts' expectations that Tesco will next month post a flat to small drop in its fourth-quarter like-for-like sales.

Sainsbury's chief executive Justin King said the firm had won market share and was well positioned to continue to outperform rivals in its new financial year, even though he expected the economic environment to remain tough. Reuters