Sainsbury reports another set of strong sales figures

Supermarket giant, J Sainsbury, has announced a strong set of sales figures which were ahead of expectations.

Sainsbury’s fourth-quarter like-for-like sales increased 4.1%, its 13th consecutive quarter of improvement. The latest sales figures beat analysts’ forecasts of growth of about 3.7%, and chief executive Justin King said it was a ‘good performance‘.

The quarter marks the end of the supermarket’s three-year turnaround programme called ‘Making Sainsbury’s Great Again‘, which was introduced in March 2005.

Mr King insisted a recession is not a certainty and the economy is performing reasonably well. He added we are pleased. I’ve not been a subscriber to the doom and gloom view. Household budgets are squeezed but food is less than 10% of the family budget. You’ve seen big price increases on things like bread and other farm goods, but the reality is that there are plenty of other things that haven’t gone up.

Other supermarkets performing well include Asda and Morrison’s but recent reports indicate that major player Tesco could hit trouble. Just last week, investment bank Goldman Sachs, issued a devastating critique on supermarkets, warning that higher food prices would squeeze their profits and the bank urged investors to sell Tesco shares - a recommendation unheard of.

Nick Bubb at Pali International said the market still seems to think that Sainsbury’s will be the big loser in the battle between Tesco and Morrison’s, but we can see no sign of it losing momentum so far.

This week, Sainsbury’s has introduced its ‘feed your family for a fiver’ campaign, offering healthy meal ideas for £5 or less.

Furthermore, the supermarket has announced it is to team up with British Land to form a £1.2 billion partnership to run 39 superstores across the UK.

Sainsbury’s is to invest £273 million into the venture, in which it will have a 50% stake. The stores are currently owned by British Land and leased to Sainsbury for 20 years.

It is hoped that partnership will enable Sainsbury’s to develop the stores involved and deliver a better customer experience.