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Sainsbury's Q4 2009 sales increase tailing off amid predictions of a tough year ahead
J Sainsbury, the country's third-biggest grocer, forecast a tough 2010 as it posted its smallest rise in underlying quarterly sales in almost five years, hit by a steep decline in food price inflation.
Grocers are battling a slowdown in price inflation, particularly in fresh foods, as well as fears that uncertainty surrounding an upcoming general election and steps to cut government borrowing will hit shoppers in the months ahead.
"While we expect the consumer environment to remain challenging in 2010, our universal customer appeal together with our accelerated growth of space for new supermarkets, extensions and convenience stores means we are well placed to make continued good progress," Chief Executive Justin King said.
Sainsbury, which runs around 525 supermarkets and 300 convenience stores, said today that sales at stores open at least one year rose 1.7%, excluding fuel, in the 11 weeks to March 20, which is Q4 of its financial year. That was down from 3.7% in Q3 and the smallest rise since the first quarter of its 2005-6 financial year, but just above the 1 to 1.5% analysts expected.
Justin King said, "We've delivered another good performance in line with our expectations on top of strong growth last year. Excluding fuel, total sales were up 4.4% with like-for-like sales up 1.7% and up 8.0% on a two year basis. Fuel price inflation has driven further growth with like-for-like sales including fuel up 4.8%. We are now serving over 19 million customers on average per week,up one million on last year.
The Co-operative Group, the fifth-biggest grocer, said last week its underlying sales were near flat.
Sainsbury said sales of general merchandise goods -- a key focus for growth -- rose at three times the rate of food. Total sales, including new selling space, rose 7.1%, or 4.4% excluding fuel.
Analysts expect Sainsbury to post profit before tax and one-off items of about £600 million for fiscal 2009-10, rising to about £660 million in 2010-11.
Sainsbury shares have lagged Europe's STOXX 600 retail index .SXRP by 4% this year, trailing faster-growing rival Wm Morrison by about the same amount, but performing broadly in line with industry leader Tesco.
Grocers are battling a slowdown in price inflation, particularly in fresh foods, as well as fears that uncertainty surrounding an upcoming general election and steps to cut government borrowing will hit shoppers in the months ahead.
"While we expect the consumer environment to remain challenging in 2010, our universal customer appeal together with our accelerated growth of space for new supermarkets, extensions and convenience stores means we are well placed to make continued good progress," Chief Executive Justin King said.
Sainsbury, which runs around 525 supermarkets and 300 convenience stores, said today that sales at stores open at least one year rose 1.7%, excluding fuel, in the 11 weeks to March 20, which is Q4 of its financial year. That was down from 3.7% in Q3 and the smallest rise since the first quarter of its 2005-6 financial year, but just above the 1 to 1.5% analysts expected.
Justin King said, "We've delivered another good performance in line with our expectations on top of strong growth last year. Excluding fuel, total sales were up 4.4% with like-for-like sales up 1.7% and up 8.0% on a two year basis. Fuel price inflation has driven further growth with like-for-like sales including fuel up 4.8%. We are now serving over 19 million customers on average per week,up one million on last year.
The Co-operative Group, the fifth-biggest grocer, said last week its underlying sales were near flat.
Sainsbury said sales of general merchandise goods -- a key focus for growth -- rose at three times the rate of food. Total sales, including new selling space, rose 7.1%, or 4.4% excluding fuel.
Analysts expect Sainsbury to post profit before tax and one-off items of about £600 million for fiscal 2009-10, rising to about £660 million in 2010-11.
Sainsbury shares have lagged Europe's STOXX 600 retail index .SXRP by 4% this year, trailing faster-growing rival Wm Morrison by about the same amount, but performing broadly in line with industry leader Tesco.
Wed, 24th Mar 2010