Sainsbury Maintains Sales Gain as Own-Label Items Win Buyers

J Sainsbury Plc (SBRY), the U.K.’s third- biggest supermarket company, said second-quarter sales rose at the same pace as in the first three months of the year as shoppers bought more of its own-brand food ranges.

Sales at stores open at least a year gained 1.9 percent in the 16 weeks through Oct. 1, on a basis that excludes gasoline and includes value-added tax, the London-based retailer said today in a statement. That compares with the median estimate of 2 percent growth from eight analysts surveyed by Bloomberg.

Sainsbury has been updating and adding new products to its 6,000 mid-tier By Sainsbury range as more shoppers favor cheaper private-label goods. The retailer gained customers by offering discounts on gasoline with some food purchases as rising fuel bills sap household budgets. Larger rival Tesco Plc (TSCO), which today reported its worst U.K. sales performance in at least six years, is fighting back with price cuts of its own.

“We expect the market environment to remain very competitive for the foreseeable future, but we are confident in our ability to grow by doing a great job for our customers,” Sainsbury Chief Executive Officer Justin King said in the statement.

Sainsbury rose as much as 3.6 percent to 284.5 pence and was up 3.2 percent as of 9:09 a.m. in London trading. Tesco fell as much as 2.1 percent.

Photographer: Chris Ratcliffe/Bloomberg

J Sainsbury Plc , the U.K.’s third-biggest supermarket company, said second-quarter sales rose at the same pace as in the first three months of the year as shoppers bought more of its own-brand food ranges. Close

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Photographer: Chris Ratcliffe/Bloomberg

J Sainsbury Plc , the U.K.’s third-biggest supermarket company, said second-quarter sales rose at the same pace as in the first three months of the year as shoppers bought more of its own-brand food ranges.

U.K. Market Share

Sainsbury’s share of the U.K. grocery market rose to 16.1 percent in the three months through Sept. 4, according to Kantar Worldpanel, with sales growth beating gains at larger competitors Tesco and Wal-Mart Stores Inc.’s Asda. Tesco said today that its U.K. same-store sales fell 0.6 percent, excluding fuel and VAT.

Sainsbury said it has introduced more than 3,000 new or improved By Sainsbury products, which are typically at least 20 percent cheaper than the branded equivalent.

The premium Taste the Difference food range and the budget “basics” line also reported “strong growth,” it said.

To contact the reporter on this story: Paul Jarvis in London at pjarvis@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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