Sainsbury’s hit by worst Xmas sales in 10 years
SAINSBURY’S said yesterday that a surge in demand for its top-end food ranges and clothing helped the retailer beat Christmas forecasts, despite posting its first drop in festive sales in over a decade.
Like-for-like sales, excluding fuel, dropped by 1.7 per cent in the 14 weeks to 3 January, as total sales fell by 0.4 per cent.
The performance was better than feared, with market forecasts predicting on average a 2.7 per cent decline.
But analysts said the figure was “concerning” and that Sainsbury’s remained vulnerable to a fight back from Tesco, whose chief executive, David Lewis, will reveal the outcome of his strategic review today.
“Sainsbury’s future largely lies in Tesco’s hands. For much of the last decade, Tesco played its hand badly and allowed Sainsbury to recover. But a change in management and strategy at Tesco is likely to change that,” HSBC analyst Dave McCarthy said.
However, Sainsbury’s finance chief John Rogers said the group was well equipped to handle a fight back by its supermarket rival. “There is a familiarity in the challenge – of what happens if and when Tesco gets the act together. However, the reality is that over that five-year period we have outperformed the market and we have done so by doing right by our customers.”
Chief executive Mike Coupe added: “Whatever happens we will be matching our competitors toe-to-toe and we believe we have the financial capacity to do that.”