Sainsbury’s set to leapfrog Asda following ‘strong sales’ over Christmas
Supermarket chain Sainsbury’s has reported ‘strong sales’ over the crucial Christmas holiday period with like-for-like sales rising 0.2 per cent excluding fuel, leading analysts to speculate it could overtake Asda in terms of market share later in the year.
Describing the week before Christmas as its ‘busiest ever’ the chain’s results were better than expected with 28m transactions recorded over that period alone.
Commenting on the results John Ibbotson, director of the retail consultancy Retail Vision, said: “The Sainsbury’s juggernaut has slowed, and the news that Justin King is mortal after all comes as a belated Christmas present to Sainsbury’s rivals.
“The store’s extraordinary record of 35 straight quarters of like-for-like sales growth is finally over. But this is unlikely to take the shine off a year in which Sainsbury’s increased profits to more than £400 million and was the only one of the big four to increase its market share.
“At this rate there’s a strong chance that 2014 will see it ease past Asda into the number two spot in market share terms.
“Justin King’s decade at the helm has seen Sainsbury’s make all the right decisions - investing early and heavily in online, convenience stores, non-food and own-label lines.
“Sainsbury’s combination of better stores, a better positioned offer and better customer service has blown its rivals out of the water. To have performed such a successful land grab in the face of a shrinking middle ground is nothing short of remarkable.
“Sainsbury’s has managed to keep its middle class customer base happy with its attractive stores and soaring sales of its Taste the Difference own label – while competing hard on price with its Brand Match pledge.
“The only question now is how long it can hang on to the hugely talented Justin King. Rumours are swirling that after this modest slowdown, he may jump ship to succeed Bernie Ecclestone as head of Formula One.”
Phil Dorrell, director of retail consultants Retail Remedy added: " "The stores over Christmas were in good shape and well supported with both good product and some good promotions, yet the clarity of their rather brave Christmas marketing campaign may have been a bridge too far, more thematic and less about product and price. Compare it to Aldi’s product by product comparison and you realise the gap.
"Sainsbury's is still outperforming online, still likely to be confirmed as the number two retailer ahead of Asda this year and still delivering improved margins."
The performance was nevertheless trumped by the Co-op which threw aside controversies surrounding the antics of Rev Flowers to post 1 per cent sales growth over the fourth quarter.