Sainsbury’s this morning reported a “robust” sales performance in its second quarter trading statement, with total sales up 8.4 per cent in the 16 weeks to October 4.
Like-for-like sales growth, excluding fuel, however, was just 4.3 per cent up for the quarter, and 3.9 per cent for the first half, which while not a disastrous performance in the current economic environment, predictably caused immediate unrest amongst analysts and shareholders.
Sainsbury's shares tumbled 10 per cent in early trading after analysts worried that the figures from the supermarket chain will be as "good as it gets".
It didn’t help that property tycoon Robert Tchenguiz sold his 10 per cent stake in Sainsbury's, at 250p a share, just 24 hours after also a massive stake in a UK company for the second consecutive day, when Icelandic bank Kaupthing's UK banking subsidiary Kaupthing, Singer & Friedlander was forced into into administration.
Tchenguiz also shifted his 25 per cent stake in Mitchells & Butlers, the pub group, for £137m, on Tuesday.
Sainsbury’s stock had fallen by a further five per cent at the end of yesterday’s trading.
However, Justin King, Sainsbury's chief executive, said: “Sainsbury's universal offer is meeting our customers' expectations for great quality and excellent value. We continue to drive improvements throughout the business and our service measures demonstrate that we continue to do a great job for our customers.
"During the quarter we continued to develop our offer to help customers manage tighter budgets without the need to sacrifice food quality,” he added. “Customers have responded well and transaction numbers continue to grow. We have continued to expand our own label ‘basics' range, which has grown to 550 products, and we now offer a wider range of these products in more stores across the estate.
“We have also refocused our promotional offers with simple and effective deals and updated the look and feel of our stores with new point-of-sale materials which highlight key offers and promotions. Customers are cooking more for themselves and our successful ‘Feed your Family for a Fiver' advertising campaign helps customers find great value, whilst maintaining food quality.”
During the quarter, Sainsbury’s expanded 11 supermarkets and opened two new stores in Flint and Dartmouth, the latter being dubbed “the UK's greenest store”. The chain also opened five new convenience stores while completing the planned disposal of a further 26 of the 57 convenience stores announced for closure earlier in the year.
Sales from its online operation grew by over 25 per cent in the quarter and it now operates from 165 stores.
King said: "The economic environment remains particularly challenging and we expect this to continue throughout the second half, but we have developed the Sainsbury's offer to perform in these conditions. Sainsbury's is a robust business with a wide customer base and universal appeal and we are well positioned as we approach the important Christmas trading period."
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