Sainsbury’s says it can beat its ‘Big Four’ competitors

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SAINSBURY’S is confident it will outperform its three big rivals this year, despite reporting its second straight quarter of falling underlying sales in what it described as the toughest market conditions in a decade.

Outgoing chief executive Justin King said: “I’d have preferred sales to be growing, but I don’t think it’s leaving on a low.

​​“You deliver your performance in the context of a market. ​T​he market has been growing at the lowest level in 10 years. O​ur competitive position remains strong.”

​Sainsbury’s, which is the UK’s third biggest retailer behind Tesco and Leeds-based Asda, reported a 1.1 per cent fall in like-for-like sales in the 12 weeks to June 7, its first quarter.

This was in the middle of analysts’ forecasts of a fall of ​0.5 to ​1.5 per cent and ​an improvement on the ​3.1 per cent ​fall in the previous quarter.

This followed nine ​years of ​unbroken sales growth.

Last week Tesco reported a 3.8 per cent fall in first-quarter like-for-like sales, its worst quarterly performance for 40 years and last month the fourth biggest player Bradford-based ​Morrisons posted a 7.1 per cent slump in first-quarter sales.

Asda is the only one to show modest growth with a ​0.1 per cent increase in its sales.

​Kantar data last week showed that Asda is outperforming its big four rivals.

Its year-on-year market share ​rose​ 0.1 percentage points to 17.1 per cent, while Sainsbury’s slipped 0.2 points to 16.5 per cent.​

Mr King said he is confident Sainsbury’s will outperform rivals this year, helped by its fast-growing convenience store chain, its online business and its own-brand ranges.

Convenience stores showed the best growth​ with sales up 18 per cent over the three months.

Grocery online sales showed growth of 10 per cent, down from highs of 16-19 per cent. Sainsbury’s said the slowdown in growth is in line with the rest of the market.

Asked what will be the growth areas in the future Mr King said he has high hopes for Sainsbury’s new online clothing range. He believes the group’s Tu brand which sits alongside the Gok Wan clothing range has great potential.

Suzanne Robinson, Yorkshire & Humber Senior Partner at EY

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