Retail sector news
Sainsbury’s steals the march
19/6/2009Britain's third-largest supermarket chain Sainsbury's has raised £432 million to snap up properties from distressed sellers in a major land-grab across the sector. The 'big four' – Tesco, Asda, Sainsbury's and Morrisons – have all announced major expansion plans this year. Sainsbury's intends to expand 50% faster over the next two years than it had planned.
The fundraising came as Sainsbury's reported a like-for-like sales increase of 7.8% in the last three months, one of the company's best-ever performances. That compares with 4.3% at Tesco.
The performance has defied expectations of Sainsbury's, with its reputation as one of the higher-end food retailers. As the economic downturn took hold, many analysts were predicting that bargain hunters would go elsewhere. The company says that sales of its 'basics' range are growing at over 50% year-on-year. Its Tu clothing brand had recorded its best-ever quarter.
Success has been attributed to a combination of price-cutting, cost-cutting - and Jamie Oliver. Sainsbury's says that while looking to save money wherever possible, its customers are also sticking to their principles, with sales of its RSPCA Freedom Food chicken quadrupling compared to the first quarter of last year.
Over the last decade Sainsbury's has been overtaken by Asda and Tesco. Tesco usurped Sainsbury's as British market leader in 1995 and is now almost twice its size.
