Sainsbury’s fuel business has dragged down its latest results announced today, with volatility in wholesale fuel prices and its aggressive price cutting on unleaded petrol and diesel helping to reduce the company’s overall turnover.
Figures for its third quarter, for the 14 weeks to January 4, show that total sales growth for the group was 2.5%, and on a like-for-like basis it was flat at 0.0%.
However, when fuel was excluded from the results they improved with overall growth at 2.7% and like-for-like sales up 0.2%.
The results cover a period when wholesale fuel prices have been falling. Sainsbury’s has been aggressively cutting its fuel prices and they have been consistently lower than the same quarter last year.
On October 30 it announced a 3ppl cut in its prices saying they were the lowest for two and a half years and at the end of November it ran a 10ppl-off promotion for customers spending £60 or more online or in-store.
In the same quarter in 2012 prices varied between 136.9pppl only dipping to 128.9ppl towards the end of the period, while this year the peak price was 132.9ppl and the majority of the time it was 128.9ppl dipping to 127.9ppl in December.
In the first two quarters, when fuel prices were much higher, the growth including fuel was consistently 0.4% higher than growth excluding fuel.
Sainsbury’s chief executive Justin King did not comment on the fuel business but referring to its Local stores he said: “Our convenience business is growing at nearly 18%, and this year on Christmas Eve we had our biggest ever sales day at nearly £7m.”
He added: “This quarter we have added over 555,000sq ft of new space, comprising six supermarkets, four extensions, and 19 convenience stores. We continue to invest in our existing store estate, refurbishing five supermarkets and 11 convenience stores in the quarter. We remain on-track to deliver our target of around 1m sq ft of new space by the end of the year.”