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Sainsbury's Hails Record Breaking Christmas Despite Tough Food Markets

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Sainsbury's reported a slight lift in sales over Christmas compared to 2011 but chief executive King remains bullish about Q4
Sainsbury's reported a slight lift in sales over Christmas compared to 2011 but chief executive King remains bullish about Q4

Supermarket giant Sainsbury's has reported a solid set of figures for its Christmas trading period, with like-for-like sales for third quarter up 1.5% (0.9 per cent excluding fuel).

The figures may look small, but the supermarket sector has faced a tough Christmas period, with Morrisons reporting a drop of more than 2% on Monday. Tesco, which is rumoured to have mounted a comeback over Christmas after a weak 2012, is due to report later this week.

Sainsbury's chief executive Justin King said the quarter had seen a strong surge in Sainsbury's own brand products with sales growing at three times the rate of brands.

Customers were also keen to stretch their earnings as far as possible, with a record 22 billion Nectar points worth more than £110 million redeemed at the till over the Christmas period.

In the days immediately before Christmas 2012, customer transactions exceeded 27 million. More than £16 million of sales took place between 12pm and 1pm on Sunday 23 December and Christmas Eve saw more than £100 million of sales, making it the best Christmas Eve on record for the supermarket.

"Customers are increasingly attracted into store by our complementary general merchandise and clothing offer and sales have continued to grow at a faster rate than food, increasing market share across non-food," said King.

"Clothing has performed particularly well, growing at over 10% year-on-year, driven by investment in core ranges across women, mens and kids and a number of profitable promotions. We also saw strong sales growth in small electricals, such as toasters and kettles, growing at over 24% year-on-year, and cookware, growing at nearly 15% year-on-year."

As with the other members of the Big Four supermarkets, Sainsbury's has continued to expand in 2012, adding 496,000 square feet of new space, comprised of six supermarkets, five extensions, and 19 new convenience stores. But in economically tough times, not everyone's convinced more aisles are a good thing.

Nick Hood, business analyst for Company Watch told Huff Post UK: "These numbers from Sainsbury are commendable under the circumstance, but this is clearly a really difficult market for food retailers and likely to stay that way for the foreseeable future.

"Many of them are going to rue their headlong pursuit of more and more out of town floor space in the past as their customer base increasingly shifts to the convenience store shopping habit... they will need to go on being as nimble operationally as they are solid financially."

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