4th Jul 2018 08:21
LONDON (Alliance News) - J Sainsbury on Wednesday reported growth in first quarter like-for-like sales and said it has secured a GBP3.5 billion financing package for its merger deal with with Asda Stores Ltd.
The FTSE 100-listed supermarket chain also said it will raise employers pay to an "industry-leading" rate. From September, Sainsbury's will introduce what it has described as "simple, fair and consistent" contract for all employees, including a pay rate increase to GBP9.20 an hour.
The company said its planned merger with peer Asda, announced at the end of April, will give the newly-created "dynamic player" the scale to create a more resilient business for the future.
The merger values the Walmart Inc-owned Asda at around GBP7.30 billion. Sainsbury's own equity value is around GBP7.00 billion.
For the first quarter to June 30, Sainsbury's total retail sales increased 0.8%. On a like-for-like basis they were up 0.2% compared to 2.3% in the comparative year-ago period.
Grocery sales grew 0.5% in the first quarter, with Groceries Online and Convenience up 7.3% and 3.6%, respectively. Argos online sales, including mobile sales, grew 12% in the period.
The company plans to open around 90 Argos stores in its supermarkets in the current financial year.
Chief Executive Officer Mike Coupe said: "I am pleased with our progress in the quarter. The headline numbers reflect the level of price reductions we have made in key areas like fresh meat, fruit and vegetables since March."
"Our price position has improved and customers have responded well, resulting in a continuation of the improved volume trend we saw in the second half of last financial year."
Last week, Kantar Worldpanel said UK supermarkets have now seen two years of consecutive growth overall, with sales 2.1% higher than last year.
According to Kantar, Sainsbury's sales fell 0.2% in the 12 weeks to June 17, with the supermarket losing 0.4 percentage points in market share, now standing at 15.6% from 16.0% last year.
Shares in Sainsbury's were trading up 0.9% at 321.40 pence each on Wednesday.
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