The third trading quarter proved positive for Sainsbury’s as it was revealed yesterday that the supermarket enjoyed a 0.2% growth despite predictions of a 0.5% decline in sales in trading forecasts. The rise in sales is Sainsbury’s 36th consecutive quarter of growth, showing that the supermarket is only growing stronger despite the trouble seen with other supermarkets.
In an earlier blog by Joshua Raymond, however, the quarter wasn’t all plain sailing for the store, as sales significantly slumped in October and November, with the growth occurring thanks to a particularly fortunate Christmas period.
Experts have suggested that shoppers most likely shopped at the cut-price stores, such as Aldi and Lidl, and returned to the familiarity of the mainstream supermarket for the Christmas period, a time synonymous with tradition. Sainsbury’s, however, deny this claim, saying that shoppers were simply saving up before splurging in the festive season.
Tesco figures revealed
The third trading quarter wasn’t all great news with other supermarket giants experiencing far more disappointing results. The pressure was on Tesco to improve failing figures with predictions of a 1.5% drop in like-for-like sales figures, though numbers announced today were far more disappointing with a fall of 2.4%.
Despite the supermarket dominating the market in terms of store numbers and size, the Christmas period is typically seen as a retailer’s best chance to show growth in sales, and following a continuing drop in figures, shareholders will be putting pressure on the store to do significantly better in the future.
Morrisons point the finger
Morrisons suffered a similar fate to Tesco in the third quarter with sales dropping by 5.4% and forcing their shares to drop a massive 7%. The store was quick to blame the rival cut-price supermarkets, with chief executive of Morrisons Dalton Phillips saying to the BBC that the challenge posed bydiscount stores was “significant”.
However, rather than blaming the cut-price markets, industry experts have instead suggested that Morrisons have fallen severely behind with the times through a lack of significant online space. A spokesperson said in a statement:
“The difficult market conditions were intensified for Morrisons by the accelerating importance of online and convenience channels, where Morrisons is currently under-represetend, and by targeted couponing which was particularly prevalent this Christmas.”
BBC business editor Robert Peston added: “A retailer without a substantial online presence…is on a fast road to obsolescence.”