Sainsbury’s Share Price Surges on 0.7 Percent Q1 Like-for-Like Sales Growth

on Jun 12, 2013
Listen

Sainsbury’s share price (LON:SBRY) climbed by 1.35 percent to ₤3.6760 on the London opening bell today, June 12, after the grocer reported strong growth in its like-for-like sales and expanded its market share in the first quarter of the fiscal year.

For the 12 weeks to June 8 Sainsbury’s reported a 0.7 percent increase in like-for-like sales (0.8 percent excluding fuel), extending its track record to 34 quarters of like-for-like growth. The figure came slightly below the median estimate of 0.9 percent growth from a Bloomberg survey of analysts but was significantly ahead of the first-quarter like-for-like sales fall of one percent at Tesco and the 1.8 percent decline at Wm Morrison.

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.

“This has been a solid performance in what continues to be a tough consumer environment. During the quarter we lapped some of our strongest performance of last year, culminating in the Queen’s Diamond Jubilee, and have extended our track record to 34 quarters of LFL growth,” Justin King, chief executive officer, said in a trading update today. “We are the only major grocer growing market share, up 0.2 per cent to 16.8 per cent.”Non-food sales continued to expand at over twice the rate of food sales with particular strength seen in home ware. Kitchen electricals sales grew at more than 34 percent year-on-year and cookware sales increased at almost 23 percent.

!m[Sainsbury’s Share Price Surges on 0.7 Percent Q1 Like-for-Like Sales Growth](/uploads/story/2981/thumbs/pic_1_inline.JPG)
Sainsbury’s, the third largest grocer by annual revenue after Tesco and Wal-Mart’s Asda, said it had opened 19 convenience stores over the quarter, refurbished a further 13, and was on track to launch about two new stores per week for the rest of the year. Along with a newly opened supermarket and the refurbishment of a further six, a total of 82,000 sq. ft. of space was added over the quarter, which contributed 0.2 percent to the growth seen in the group’s like-for-like sales.

“We expect the challenging economic environment to continue through this financial year,” CEO King said today. Sainsbury’s managed to outpace its rivals, benefitting from being one of the two big UK grocers that wasn’t involved in the horsemeat scandal earlier this year, but still remains vulnerable to industry challenges. “Capacity growing faster than demand, fundamental changes in shopping behaviour and the transition of trade from large stores to the Internet and convenience stores are all hurting the quoted sector, including Sainsbury,” Investec analyst Dave McCarthy told Bloomberg in a telephone interview.
**Sainsbury’s share price was ₤3.65 as of 12.06.2013, 08.17 BST.**

Ad

Want easy-to-follow crypto, forex & stock trading signals? Make trading simple by copying our team of pro-traders. Consistent results. Sign-up today at Invezz Signals.

Learn more
Food & Beverage Retail Stock Market