Jubilee helps lift sales at Sainsbury’s

The group, which lags Leeds-based Asda and industry leader Tesco by market share, said it outperformed the industry and was well placed to continue to do so, despite expecting it to remain competitive.

“Customers continued the habit of savvy shopping to save money in order to be able to treat themselves on special occasions, shown by strong sales in the lead up to the Jubilee celebrations,” chief executive Justin King said.

“Just as in 2011, the quarter was characterised by five bank holidays, a royal event and periods of unseasonal weather.”

Sainsbury said sales at stores open over a year, excluding fuel, rose 1.4 per cent in its first quarter, the 12 weeks to June 9, which it said was in line with its expectations.

Although the outcome fell within analyst forecasts of growth of 1 to 2.25 per cent, it was a slowdown from growth of 2.6 per cent in the fourth quarter of the 2011/12 year.

Sainsbury’s performance looks good relative to Tesco, which on Monday posted a 1.5 per cent fall in first-quarter underlying sales. However, Tesco’s first-quarter period did not include the Jubilee holiday.

Sainsbury’s overall British sales rose 3.6 per cent.

It pointed to the success of its “Brand Match” pricing promotion, own-label food ranges and market share gains in general merchandise, with the quarter seeing the strongest ever sales week in clothing.

It also highlighted year-on-year sales growth of 16 per cent at its convenience stores and growth of over 20 per cent for its online business.

Retail sales bounced back last month as warm, sunny weather tempted shoppers to buy summer clothes and food and drink, a survey from the British Retail Consortium said last week, painting a more positive picture of the economy, which slipped back into recession around the turn of the year.

However, June has got off to a very wet start and many retailers are struggling as shoppers continue to be squeezed by prices rising faster than wages and government austerity measures.

Consumers are also worried about job security, a shaky housing market and fallout from the euro zone debt crisis.

Last month Asda posted a 2.2 per cent rise in underlying sales in its first quarter, while Bradford-based Morrisons reported a 1 per cent fall and said it would not join the wave of promotions, led by Tesco, sweeping the industry.