Sainsbury’s sales surged up in the first quarter of its year as it revamped its convenience food ranges and held down prices on staples such as strawberries and potatoes.
Like-for-like sales excluding fuel at stores open more than a year surged 2.3 per cent in the 16 weeks to July 1, well ahead of the 0.3 per cent it recorded in the previous quarter, the Telegraph reports.
Sainsbury’s, which was helped by the later timing of Easter this year, credited its progress to 430 new and improved products it launched during the quarter, including more than 250 new summer lines.
Total sales climbed 2.7 per cent, with grocery sales up 3 per cent, as it opened one new supermarket and 10 more convenience stores.
The sales growth came despite inflation running at around 3 per cent, eating into consumer spending. Recent data from Kantar Worldpanel suggested this would add around £133 to shoppers’ annual food bills. At the same time, Kantar reported that British grocers had enjoyed their best quarter in five years thanks to rising prices.
Mike Coupe, chief executive, said the market was “competitive” and that Sainsbury’s continued to “manage cost price pressures closely”. The supermarket cited Jersey Royal potatoes and strawberries as examples of items where it had kept a lid on price rises.
“We have delivered a strong performance, driven by our differentiated strategy, offering customers quality, value and choice across food, general merchandise, clothing and financial services,” Mr Coupe added.
“Grocery sales are up 3 per cent and transactions up 2 per cent, with like-for-like transaction growth in all channels.
“Our produce category, where we know quality matters most to customers, performed particularly well, outperforming the market with volume growth of over 1 per cent.”
The company – which acquired Argos last year – also outperformed the market in general merchandise, or non-food products. Sales of clothing surged 7 per cent in the quarter.
Sainsbury’s has reportedly tabled a £130m takeover bid for Nisa, the convenience store chain and supplier. It did not make mention of Nisa in its trading update.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “The recent heatwave helped to boost sales at Sainsbury’s group, as customers turned to the Argos website to buy electric fans and paddling pools to keep cool in the hot weather. Sales also rose at the supermarket checkouts, though with the cost of food imports rising because of weaker sterling, it remains to be seen how much of this will feed through into profits.”
Sainsbury’s shares rose 1.3 per cent in early trade to 252p.