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J Sainsbury said stronger volume growth was offsetting lower inflation as it posted a 7.4 per cent increase in sales during the festive quarter, boosted by its premium ranges and promotions.
Grocery sales at the UK’s second-largest supermarket chain were up 9.3 per cent in the 16 weeks to January 6, but the group’s overall figure was dragged down by a 0.6 per cent decline in general merchandise sales, including Argos, and a 1.7 per cent fall in clothing. Total retail sales excluding fuel were up 6.5 per cent during the period.
Chief executive Simon Roberts, who has been focusing on sharpening Sainsbury’s food offering over the past three years, said the retailer entered 2024 “with good momentum”.
The grocer reiterated its underlying pre-tax profit guidance of £670mn-£700mn for the year.
It has also expanded its Aldi Price Match this month to include more than 550 products as it seeks to attract more cash-conscious shoppers to its stores and prevent existing ones from defecting to rivals.
UK supermarkets have been cutting some prices as food inflation comes down, but major grocers Sainsbury’s and Tesco have also been deploying loyalty schemes such as Nectar and Clubcard to keep food bills low while harnessing shoppers’ data.
Sainsbury’s, which last month reached its highest grocery market share since December 2020 at 15.8 per cent, according to Kantar, said Nectar participation hit 90 per cent on an £80 weekly shop during the quarter, helping customers to save £16 on average during Christmas week.
William Woods, a retail analyst at AllianceBernstein, said: “The strength in grocery is consistent with Kantar’s recent data which shows consistent share gain, particularly during Christmas period as their strong focus on innovation and food first strategy is working.”
The company said it would update investors on its strategy next month.
