UK grocery retailer Sainsbury's says it has achieved a good performance ahead of the market, despite recording its lowest growth in quarterly sales for five years as a result of high fuel prices and low food price inflation.
In its first quarter trading statement for the 12 weeks to 12 June 2010, the supermarket operator announced like-for-like sales, including petrol and adjusted for higher VAT, of 1.1 per cent, compared with a 7.8 per cent rise during the same period last year.
Despite this, the retailer’s chief executive, Justin King, said in a statement that contribution from net new retail space had increased by 3.3 per cent, which it said reflected a strong performance from new stores ahead of expectations.
During the quarter, Sainsbury's opened one supermarket and completed two extensions, which it said kept it on track to deliver its accelerated space growth plans to add around 1.45m ft2 in 2010/11.
Mr King said: “We have made a good start to the financial year in line with our expectations. While we continue to expect the consumer environment to remain challenging, our universal customer appeal, unique loyalty offer and accelerated growth strategy mean we are well placed to make continued good progress.”
However, he also told the BBC that expected UK government spending cuts were likely to further limit consumer spending this year.
“It is going to be flat across the market and that is the reason why – customers’ budgets are going to be under strain,” Mr King said.
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