Sainsbury’s lifts market share and overtakes Asda as UK’s number two supermarket

Sainsbury's: record market share

Sainsbury’s: record market share

Sainsbury’s has increased its market share to 16.8%, the highest for a decade, and overtaken Asda as the UK’s second largest supermarket.

Reporting interim results for the 28 weeks to 28 September 2013, Sainsbury’s posted a 1.4% increase in like-for-like sales – completing 35 consecutive quarters of like-for-like sales growth – and total sales up 4.0%. 

Profit before tax rose 9.1% to £433m.

Own brand has been a key driver.

According to Sainsbury’s, own label is reported to be growing at over twice the rate of branded goods with the Taste the Difference brand showing double-digit growth and a relaunch of its budget basics brand in the pipeline.

General merchandise and clothing are also reported to have done well – growing at around twice the rate of food sales – with the Tu clothing brand recently extended into general merchandise.

Sainsbury’s said it has rebalanced its general merchandise sales mix away from less profitable, high-ticket electricals towards ‘hero’ categories such as cookware and small domestic appliances. 

Online grocery is reported to be growing at over 15%, with over £1bn in annualised sales and orders regularly exceeding 180,000 a week. 

Sainsbury’s has announced plans to create an online fulfilment centre at Bromley-by-Bow to meet demand for online grocery service in London and the South East. According to the retailer, the new facility will allow it to serve an additional 20,000 customers each week.  

More than half its customers opt to collect their online general merchandise orders via click & Collect service, which is available in over 1,000 supermarkets and convenience stores, the retailer added.

Sainsbury’s is also piloting Mobile Scan & Go to allow customers to scan their shopping using a smartphone. 

Feedback from a four store trial is reported to be positive with customers saying it helps them stick to a budget. 

Sainsbury’s said its convenience business is growing at over 20% year-on-year with around two new stores opened each week and it expects the number of Sainsbury’s Local stores to exceed the number of supermarkets in its portfolio later this financial year.

During the half, Sainsbury’s opened 393,000sq ft of space, comprising six supermarkets, 50 convenience stores and two extensions. 

Justin King, chief executive, said: “Our share of the grocery market is the highest for a decade at 16.8 per cent following 35 consecutive quarters of like-for-like sales growth. We are helping customers Live Well for Less through high-quality, affordable own-brand products, Brand Match, Nectar and targeted coupon-at-till promotions. 

“Whilst customers‟ budgets remain tight and any recovery in the economy may take time to take effect, our consistent strategy and strong values-driven culture mean we are well placed to continue to deliver for customers, colleagues and shareholders.”