J Sainsbury Plc, the U.K.’s third-largest supermarket company, said online grocery sales reached 1 billion pounds ($1.6 billion) a year, hitting the milestone about seven years after bigger rival Tesco Plc.
Sales growth at Sainsbury’s online unit exceeds 16 percent a year, according to a statement today from the London-based retailer, which had total revenue of 23.3 billion pounds in its last fiscal year.
Sainsbury first started selling groceries online in 1999, about nine years after the launch of Tesco.com. Tesco had U.K. Internet sales of about 2.3 billion pounds last year. Both companies are ahead of William Morrison Supermarkets Plc, which plans to start an online grocery service in January.
The Web business makes a “reasonable contribution” to Sainsbury’s growth, said Andrew Gwynn, an analyst at Exane BNP Paribas. “The question is just whether it’s profitable.”
Sainsbury is set to report a 35th consecutive quarter of same-store sales growth on Oct. 2. Sales at stores open at least a year rose 2 percent, excluding revenue from fuel, in the second quarter of the fiscal year, according to the median of 12 estimates in a Bloomberg News survey of analysts. That’s more than double the first quarter’s 0.8 percent growth.
Sainsbury was the only one of the four biggest U.K. grocers to gain market share on an annual basis in the 12 weeks through Sept. 15, controlling 16.6 percent of the market compared with 16.4 percent a year earlier, Kantar Worldpanel said Sept. 24.