May 08 - Justin King has dismissed speculation he was set to stand down as the head of J Sainsbury, committing the next few years to Britain's third-biggest grocer after posting yet another set of forecast-beating results. Hayley Platt looks at Sainsbury's chances of challenging the likes of Britain's number one retailer Tesco.
Eight profit increases in eight years - not a bad record for a grocer operating in a struggling country. J Sainsbury is Britain's third biggest supermarket - its latest 6.2% increase to 756 million pounds beat expectations again. Total sales were up almost 5 percent to 25 billion pounds - buoyed by online buying and clothing. So is Sainsbury's becoming a serious challenger to Britain's number one retailer Tesco? Verdict's Andy Stevens. SOUNDBITE: Andrew Stevens, senior retail analyst, Verdict, saying (English): "The fact that Tesco has slipped up of late and is trying to improve its position, there's a lot of market share up for grabs. What happens to that share, a lot of it will go to Asda and a lot will go to Sainsbury's, so there will be a battle for second place which Sainsbury's does look set to be competing well in." CEO Justin King used the positive results to quash speculation he might stand down. After nine years in the job he said he had a few more left yet. He's planning to oversee investment in store improvements, the online business and smaller local shops - the latter two are the fastest growing areas for Britain's supermarkets. But Sainsbury's is also investing in banking - it's buying the 50 percent stake in Sainsbury's Bank currently owned by Lloyd's. SOUNDBITE: Andrew Stevens, senior retail analyst, Verdict, saying (English): "What they really want to do is to be able to be able to convert Sainsbury's shoppers into Sainsbury's bank customers. They've got proven data that Sainsbury's bank customers will spend more money in store than a normal Sainsbury's shopper. Currently about 1 in 20 Sainsbury's shoppers are banking customers as well. What they want to do is increase that number to get more people spending money in store." Many British retailers have struggled during the economic downturn, as consumers battle high inflation and meagre pay rises. But Sainsbury's has stood out against the field, posting 33 consecutive quarters of underlying sales growth.