British supermarket Sainsbury's posts rising sales

6th October 2010, Comments 0 comments

British supermarket chain Sainsbury's said on Wednesday that sales rose slightly in the group's second quarter, but it warned that the outlook remained challenging.

Sales on a like-for-like basis, which strips out the effect of new floor space, increased by 2.9 percent in the 16 weeks to October 2, compared with the outcome in the same period of last year, Sainsbury said in a trading update.

The figure, which excludes petrol sales, compared with a 4.6 percent increase last time around, and follows a smaller 1.1-percent gain in the group's first quarter.

Sainsbury is the third-biggest British supermarket chain by sales, after Wal-Mart owned Asda and the country's largest retailer Tesco.

"We've delivered another strong performance and grown market share," noted Chief Executive Justin King in Wednesday's statement, saying that non-food sales were growing at three times the rate of food.

"We expect the consumer environment to remain challenging and will continue to work hard to deliver universal appeal through providing great value, great quality products to our customers."

He added that Sainsbury was "well placed to make continued good progress" despite the cautious outlook.

Total sales, excluding fuel, added 5.2 percent in the second quarter, compared with last time around.

In early morning deals, the group's share price gained 0.49 percent to 391.50 pence on London's benchmark FTSE 100 index, which was up 0.82 percent at 5,681.90 points.

"The numbers reported generally outpaced expectations, whilst the accompanying guidance was relatively upbeat," said Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers.

"The company is, of course, mindful of the consumer challenges ahead but maintains it is well placed to weather the economic storm given its propensity for value offerings."

© 2010 AFP

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