Sainsbury’s and Tesco have reported surging sales – with Sainsbury also revealing ambitious expansion plans. In its First Quarter Trading Statement for 12 weeks to 13 June 2009, Sainsbury’s said total sales for the first quarter were up 3.2 per cent (7.6 per cent excluding fuel). There was also continued growth in customer numbers – the supermarket reported having over 18.5 million transactions each week. Meanwhile, Sainsbury’s said it aimed to raise approximately £445 million of capital to “accelerate growth plans” which included acquiring 15% more floor space by March 2011.
Justin King, Sainsbury’s chief executive, said: “I’m delighted to report another strong quarter of sales growth as we continue to provide universal customer appeal and build on the strength of the Sainsbury’s brand. Like-for-like sales, excluding fuel, were up 7.0 per cent, and adjusting for the negative impact of the change in the rate of VAT, like-for-like sales growth in the quarter, excluding fuel, was 7.8 per cent.
“Providing both quality and value has been central to our brand throughout our 140 year history and remains at the heart of our business. Customer numbers have increased to over 18.5 million a week and basket size has grown as further investment in price and product ranges helps customers get the best value from their weekly grocery shop.
“Consumers are spending more cautiously but continue to look to trusted brands to act responsibly on ethical and environmental concerns on their behalf. Sainsbury’s continuous innovation gives us a leading position on such issues.”
The company said it created an additional 1,000 new jobs during the quarter as well as extending two supermarkets and opening five new stores. It also bought three sites from the Co-operative group as announced in March. It also announced this week that it had agreed the acquisition of a further six supermarkets and three convenience stores from the Co-operative Group.
In a separate statement, it said its intention was to raise approximately £445 million”via a placing of new ordinary shares and an issue of convertible bonds”, with plans to grow space by 15 per cent, equivalent to circa 2.5 million sq ft, by March 2011. It added: “In the current environment there are an increasing number of opportunities within the property market.”
The results came after Tesco reported that it had made “a solid start to the year” in the UK. Excluding petrol and VAT, like-for-like retail sales for the quarter increased by 4.3% (3.3% growth including VAT). Including petrol, which Tesco said had seen substantial deflation in recent months, total UK sales including VAT grew by 5.5%.
Tesco chief executive Terry Leahy said: “We’ve made a solid start to the financial year, maintaining good momentum in a challenging economic climate – by investing in our offer for customers and adjusting our businesses well locally to meet their changing needs. We are also keeping a strong focus through the downturn on our long-term strategic objectives and I am encouraged by the impetus last year’s acquisitions – of Tesco Personal Finance and Homever in Korea – are now giving the Group.”