Jan. 8 - British grocer J Sainsbury has reported a 36th consecutive quarter of like-for-like sales growth despite a ''tough market''. As Hayley Platt reports the results boosted shares by 3% and were welcomed by CEO Justin King.
Sainsbury's may have served up its best Christmas ever but it seems the new year isn't looking quite so rosy. Like-for-like sales over the festive period beat forecasts. But the grocer also cut its sales growth forecast because it expects consumers to tighten their belts. The UK economy may be looking up but so is inflation and wages are stagnant. CEO Justin King. SOUNDBITE: Justin King, CEO J. Sainsbury, saying (English): "In competitive market places, if you don't stay close to your customers, eventually you die. One of the things we're seeing already, and we'll see if this continues, as all companies reveal their Christmas trading figures, there's quite a big difference between those that have done well and those that have done badly. I think that reflects customers being really careful where they spend their money." The latest 0.2% sales rise is well down on the second quarter's full 2% increase. That doesn't mean Sainsbury's isn't attractive to investors. It's now seen 36 consecutive quarters of expansion and is fighting Walmart's Asda for the number two grocer spot behind Tesco. Robert Cole is from Reuters BreakingViews. SOUNDBITE: Robert Cole, Deputy Editor, Reuters BreakingViews, saying (English): "If you land from Mars what's Sainsbury's doing, it looks as flat as a pancake, which doesn't seem to be terribly good really but actually the pressures in the market, discounters like Lidl and so on at the bottom end of the range and M&S at the top suggests that actually standing still isn't too bad." Own brand and non-food sales helped Sainsbury's. Online business also rose 10% with smaller convenience stores seeing an 18% sales increase. But it's a tough market and the middle range "big four" are being squeezed. Discounters Aldi and Lidl both had record Christmases. And up-market Waitrose saw a 3% sales rise. No figures yet from Tesco, Asda or Morrisons.