Sainsbury’s increases third quarter sales through value and premium lines

Sainsbury's: managing value and quality

Sainsbury's: managing value and quality

A combination of offering premium and value products helped Sainsbury’s increase sales by 4.5% (excluding fuel) and by 2.1% on a like-for-like basis in the third quarter.

According to Sainsbury’s, sales of its premium Taste the Difference own label grew by over 10% in the 14 weeks to 7 January 2012; while its Basics value own label offer also grew strongly, especially staple ingredients. The retailer’s Live Well For Less campaign enabled shoppers to take advantage of value lines in October and November and then trade up in the holiday season, it said.

Justin King, chief executive, said: “Customers have really embraced Live Well For Less, taking advantage of Sainsbury‟s unique combination of  quality and value to help manage their total spend.”

Retail analysts Conlumino said Sainsbury’s had responded well to the trend for consumers to polarise their shopping habits, 

Matt Piner, lead consultant at Conlumino, said: “Sainsbury’s has reacted to this trend by both expanding its Live Well For Less and Basic lines and also growing its Taste the Difference range. This has helped in attracting and retaining customers, who feel they can get good value and premium products all under one roof.”

In non-food, Sainsbury’s said clothing and general merchandise outperformed food, with sales of Christmas gifts up over 10% in the quarter.  Online, nearly three quarters of all general merchandise orders used the supermarket’s click and collect service to pick up products from local stores.

During the period, Sainsbury’s added 600,000sq ft of new space, including 21 convenience stores, and said c-stores grew sales by almost 25% in the quarter.

Piner said: “Sainsbury’s is at a ideal stage of development at present. New space and a small but growing non-food range are boosting growth and, widening its food proposition to put a greater focus on value, alongside its heritage as a quality retailer, has helped give it a more diverse appeal.

“These results are likely to be stronger than Tesco has managed, but the real test will be whether Sainsbury’s has outperformed the likes of Asda and Aldi, which seem likely to have benefited from their strong value credentials over what was a tough festive period for shoppers.”