Weekly shop

23 Jul 2003

The UK retailer is in the last year of its turnaround plan. Yet its strategy is not delivering topline growth. Worse, excluding petrol, likeforlike sales actually contracted. That leaves the group relying on cost cuts to boost profits.

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J Sainsbury reported that its sales had grown 2% in the first quarter – including petrol and excluding the late impact of Easter this year. It said likeforlike sales grew by 0.3%, a figure which turns slightly negative when stripped of petrol. The UK retailer said petrol price inflation was 0.3% in the quarter, and that it saw 0.1% deflation excluding petrol.

Sainsbury's Sir Peter Davis, the chief executive, said that he wasn't satisfied with the group's sales performance in the last two quarters. The weak top line was blamed on strong comparatives last year, and disruption in the stores due to the significant changes being implemented.

Sainsbury says that the end of the quarter showed a pickup. It reckons that the second half of the year will be better, thanks to the launch of its nonfood offering and the increased focus on fresh food. The group also said that profits in the quarter were ahead of those at the same time last year, and that it remains committed to its target of extracting £250m of costs from the business this year.

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