Sainsbury’s takes a bite out of its rivals
We’re pinching sales, says boss, after profits rise
The boss of Sainsbury’s says it is ‘taking business from our competitors’ after a 3.4pc rise in annual sales to £36bn.
Simon Roberts said the country’s second-biggest supermarket was pinching shoppers from discounters Aldi and Lidl as well as more expensive rivals.
He said its groceries business was ‘firing on all cylinders’ as a strategy to ‘put food back at the heart’ of the group paid off.
Food sales rose 7.3pc in the fourth quarter and 9.4pc over the year. however, other areas lagged behind.
Higher grocery sales helped profits to climb 1.6pc to £701m for the year to March 2.
Roberts ( pictured) added: ‘We have the best combination of value and quality and that’s winning us customers from all our key competitors.’
There has been intense competition between grocers as households grapple with the cost of living squeeze. But Sainsbury’s said an Aldi price match campaign helped it to woo shoppers back from the German discounter, which has seen its sales momentum slow in recent weeks.
Staff returning to work in offices also helped to lift shop sales.
It is another boost after industry data this week showed that Sainsbury’s has been a star performer alongside top grocer Tesco. Kantar said its slice of the market rose from 14.9pc to 15.3pc in the 12 weeks to April 14 compared to the same period a year earlier. however, yesterday’s results revealed a disappointing performance for clothing, with sales sinking 6.4pc. General merchandise sales, including Argos, were down 0.5pc.
It comes as the chain is set to overhaul stores to give groceries more space. Meanwhile, in a development that threatened to overshadow the results, customers were fuming after online orders were cancelled due to technical issues yesterday. Investors were unimpressed by the Sainsbury’s update and shares fell 4.3pc, or 11.4p, to 256.6p.
Retail analyst Nick Bubb said Sainsbury’s ‘ food first’ strategy ‘seems to be paying dividends, but it will need to find a way to improve its performance in non-food’.