Sainsbury’s profits up due to its “universal appeal”

Wednesday, 12 November 2008

Sainsbury's saw sales rise 7.6% in the six months to the start of October, as it showed "universal customer appeal" despite the credit crunch, the retailer said today.

Like-for-like sales growth excluding fuel in the 28 weeks until 4 October 2008 was 3.9%, Sainsbury's said, meaning growth has been sustained for the last 15 quarters.

Underlying profit before tax jumped 13.3% against the same period last year to stand at £272m, with profit up to £258m.

The figures came after TNS revealed Sainsbury's saw its sales rise by 6% in the 12 weeks until the start of November, and that its market share is almost 16%.

Justin King, chief executive, said: "Our universal customer appeal has been fundamental to our sustained performance and we have continued to invest in both product quality and competitive pricing.

"Getting the best value for money is even more important to consumers when household budgets are stretched.

"Customers are now buying a different mix of products and we have successfully developed our offer to help offset the rising cost of living and tighter household budgets."

King added that, following a review, Sainsbury's is looking to accelerate growth in the convenience sector of the business.

He said: "While we expect the economic environment during the second half to remain particularly challenging, we are developing our offer to continue to meet the needs of customers and maintain our good progress."

Chairman Philip Hampton said the retailer is now more "robust" thanks to the recovery plan it has had in place for the last four years, including emphasis on its brand heritage.

He commented: "Sainsbury's is now a more robust business, with a strong financial position and capable of responding successfully to the current challenging economic conditions."

The company this week said television duo Ant and Dec will front its new Christmas advertising campaign, in which they clash with celebrity chef Jamie Oliver.

Will Sainsbury's be able to continue its success in difficult trading conditions? Have your say in below.