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Sainsbury's growth down on first quarter

Published:  23 July, 2008

Sainsbury's has reported strong sales growth during the second quarter of its financial year, despite the poor weather over the summer.

UK: Total sales were up by 3.8%, or 4.7% excluding fuel, outperforming the grocery market as a whole.

Like-for-like sales rose by 2.6% (or 3.1% excluding fuel) during the 16 weeks to October 6, representing Sainsbury's eleventh consecutive quarter of like-for-like growth.

But the growth was considerably down when measured against the first quarter of the year, when total sales growth was 5.7%, or 6.7% excluding petrol.

Like-for-like growth during the first quarter was 4.4%, or 5.1% excluding fuel.

For the first half of the retailer's financial year, like-for-like sales were up 3.3% (4% excluding fuel), in line with the company's expectations.

Justin King, chief executive, said: "This result represents strong sales growth in a quarter with some very tough comparatives, particularly during the first six weeks where exceptionally warm weather helped to deliver additional growth across the business last year.

"Our two-year like-for-like growth remains at around 10%, building on the excellent results delivered last year."

King said growth in customer transactions was continuing to drive an increase in customer spending, adding: "We maintained our competitive position during the quarter reducing prices on another 7,000 products and also reinforced our strong heritage in quality products."

Sainsbury's was also increasing the capacity of its supply chain "enabling us to deliver greater operational flexibility and meet future volume growth."

King concluded: "We have delivered a good first half sales performance in line with our expectations for the current year despite the poor summer weather.

"The market remains competitive but our business continues to operate from a strong position, delivering growth and operational improvements each quarter.

"We remain ahead of our Making Sainsbury's Great Again three-year target to grow sales by 2.5bn by March 2008, having now delivered 2.3bn of additional sales and we are confident in our ability to deliver the new space and sales growth targets which we outlined in May 2007."

King also said the company was "delighted" to be named Supermarket of the Year at last month's Retail Industry Awards - run by Talking Retail's parent company - where the judges described it as being "at the leading edge of food".