Asked whether Sainsbury’s shoppers are likely to spend less this festive season, chief executive Justin King said that while times are tough, shoppers intend to treat themselves and their families.
“Christmas will be spaced out over time. Lots of mums stocked up on presents during our toy sale in October,” said Mr King.
“People are spreading the cost of Christmas, but they will splash out. We think it will be a quality, celebratory Christmas.”
The group expects strong sales of its upmarket Taste the Difference range, which shoppers will balance out by paying less for the group’s own label and basics ranges.
Mr King was speaking yesterday as the group reported a 5.4 per cent rise in half-year profits to £373m.
Sainsbury’s reported like-for-like sales growth of 1.7 per cent for the six months to September 29.
Last week Bradford-based Morrisons announced a 2.1 per cent fall in third-quarter underlying sales and said a third of families are saying they will consciously cut back on presents.
Sainsbury’s has benefited from its Brand Match money-off coupon scheme and has printed off 250 million vouchers since the launch a year ago. Over half of the vouchers said Sainsbury’s was cheaper than its rivals.
Analysts are predicting a raft of promotions in the run-up to Christmas following Morrisons’ decision to launch a 10 per cent discount card.
Mr King denied rumours yesterday that he has plans to leave Sainsbury’s.
“I do understand why, when someone’s been in a job for eight years successfully, people think they’d have on their mind doing something else, but I’m very happy at Sainsbury’s,” he said.
The group’s performance has been boosted by a 20 per cent sales increase at its online and convenience stores businesses.
Mr King said Chancellor George Osborne’s December 5 autumn statement should focus on job creation.
“The best way to drive growth is to reduce barriers to employment. Nothing does more for the health of the economy than having more people in jobs – it builds confidence, reduces the burden of unemployment on the State and increases retail expenditure,” he said.
He said one way to achieve this could be a national insurance holiday on new jobs for 12 months.