Sainsbury’s recovery is slowed by summer dip
SUPERMARKET group Sainsbury’s today reported a slowdown in sales growth as it battled against poor summer weather and tough competition.
The company, which has stores across the Tees Valley and in 2004 took over Bells Stores chain, said like-for-like sales in the three months to October 6 rose by 3.1%, excluding fuel, down from 5.1% growth in the first three months of the financial year.
Sainsbury’s, which is currently a takeover target for Qatari-backed Delta Two, added the slowdown in the second quarter mirrors similar results from Morrisons and Tesco, as both reported weaker sales against tough comparatives with the World Cup and exceptionally good summer weather last year.
Like-for-like sales in the first half of the year increased by 4%, driven by growth in customer transactions.
Last week, Tesco, the UK’s largest supermarket, posted a 3.5% rise in like-for-like sales during the six months to August 25.
The sales figure marks Sainsbury’s 11th quarter of growth under its recovery plan headed by chief executive Justin King.
Mr King said the firm was ahead of its Making Sainsbury’s Great Again three-year target to increase sales by £2.5bn by March 2008.
Sales are currently £2.3bn ahead, and Mr King said he was confident in Sainsbury’s ability to deliver new space and sales growth during the remainder of the year.
But the company did not make any comment on its current takeover situation with Delta Two. It opened its books to the potential bidder, which is understood to be preparing a 600p-a-share bid, valuing Sainsbury’s at £10.6bn.
