Sainsbury’s enjoys a fine festive season as it beats City forecasts

SAINSBURY’S pledged yesterday to maintain its price‑matching scheme and build on its middle-market position as it rang up better‑than‑expected sales spanning the festive period.

The supermarket giant, which has nearly 50 stores and 16 convenience outlets in Scotland, revealed that like‑for‑like sales rose 1.2 per cent, excluding fuel and VAT. This beat City forecasts of 0.9 per cent growth for the 14 weeks to 7 January.

However, when sales from store extensions were stripped out this growth figure came back to about 0.5 per cent, broadly in line with rival Morrisons which on Monday revealed like‑for‑like sales growth of 0.7 per cent in a shorter six-week period.

Sainsbury’s emphasised its 2.1 per cent sales increase over a longer reporting period. The more favourable figure excluding only fuel.

Justin King, group chief executive, said sales of the group’s pricier “Taste the Difference” range lifted 10 per cent, but sales of its lower‑priced Basics products also rose strongly.

“We think that middle position allowing customers to do both [have treats and save money overall) is the place to be,” he said.

Bigger rival Tesco is expected to reveal its worst Christmas performance in Britain for decades today, mainly due to its much bigger exposure to non‑food ranges where survey show consumers are economising most.

Sainsbury’s responded to price-cutting campaigns launched by Tesco and Asda last year with its own Brand Match scheme – a guarantee that if an identical basket of branded goods could be bought more cheaply then a coupon is given at the till for the difference.

The group said the scheme had been a hit and would be continued into what it forecast would be a challenging market this year.

“We expect the consumer to remain in a very tough place. We see 2012 as a continuation of 2011 – more of the same,” King said.

The update came after market research figures from Kantar revealed Sainsbury’s achieved its highest share of the food retailing market since March 2003, with a 16.7 per cent slice.

The group, which disclosed that more than 1,700 of the 17,000 temporary Christmas workers it took on would be given full-time jobs, said online grocery sales rose 20 per cent, while convenience store sales jumped 25 per cent.

City analysts are forecasting full-year pre-tax profits of about £700m. Finance chief John Rogers said he remained comfortable with a consensus forecast of £702m.