12th Jan 2006 07:01
Sainsbury(J) PLC12 January 2006 12 January 2006 Third Quarter Trading Statement for 12 weeks to 31 December 2005 Highlights • Total sales growth of 5.9 per cent with like-for-like sales of 5.2 per cent (excluding petrol) (4) • Total sales growth of 5.6 per cent with like-for-like sales up 4.8 percent (including petrol) (4) • Fourth quarter of consecutive like-for-like sales growth • Strong delivery of Christmas offer; over 19 million customer transactions in Christmas week • Continued investment in the customer offer • Continued growth in market share (2) Trading Justin King, chief executive, said: "We are pleased with our trading performanceover the past 12 weeks which has resulted in our fourth consecutive quarter oflike-for-like sales growth. We delivered a good offer for over 19 millioncustomers in Christmas week, the most we have ever served in a single week. Weprepared for Christmas well, developed outstanding seasonal products,strengthened promotional activity and worked hard to deliver great availability.This was particularly important in fresh product categories, a key area for ourregular customers and essential at Christmas. Like-for-like sales growth of5.2 per cent (excluding petrol), reflects the progress made in this first yearof our recovery plans. The customer experience is much improved, but we stillneed to achieve this at a more acceptable cost. "There was 1.0 per cent deflation in grocery as we continued our investment inthe customer offer. We have made great progress in our price position over thepast 12-18 months and we will ensure our position is maintained andstrengthened. "Improved availability and service in our main chain has also been reflected inour online home delivery operation. Sales were up 27.5 per cent in the quarter.As a result we are now starting to extend the delivery area of the 97 storescurrently operating the service. "Petrol volumes, year on year, were lower in the third quarter as promotionsonly ran for four weeks compared to the whole quarter in the previous year.This resulted in total like-for-like sales growth of 4.8 per cent. With petrolprice increases, total inflation for the quarter was 0.5 per cent. Making Sainsbury's Great Again "Independent market research (2) continues to show growth in our market share.This is primarily driven by strong like-for-like growth as we are currentlyopening less new space relative to the market. Customers are responding well tothe improved Sainsbury's offer and our Try Something New Today branding hasclearly struck a chord. We have seen substantial uplifts in advertised productsand ranges as customers are engaged and inspired by cooking ideas and tips. "In December 2005 Sainsbury's was awarded nine Silver Q Awards and the covetedGold Award at the 2005 Quality Food and Drink Awards. This was more than anyother retailer and the third year running that Sainsbury's has won the overallGold quality award. Kicking off the New Year, we re-launched our Be Good ToYourself range last week with an investment of around £10 million. The rangecomprises nearly 500 products, an increase of around 25 per cent, including many'first to market' initiatives such as white, wholemeal and brown bread which hashigher fibre and lower salt (5). The Be Good To Yourself range has been updatedfrom a 'diet' brand to a more holistic health brand providing customers with thechoice of low fat diet products as well as healthier options and 'plus' mealswhich include products which are fortified with added ingredients such asprebiotics, probiotics and Omega 3. "During the third quarter we opened, extended or refurbished 25 convenience and26 supermarket stores (6) including nine Safeway stores acquired from Morrisons.Customers have welcomed the Sainsbury's offer as it has become available in newareas. Thirteen of the original 14 stores (7) acquired from Morrisons in April2004 are now in their second year of trading under the Sainsbury's brand and aredelivering sales growth averaging over 20 per cent. "We are continuing to reorganise our depot network to ensure the most efficientdistribution of product to stores and as previously announced, our depot atRotherham will close in the next few days. Since Exel has undertaken themanagement of our network in the southeast, it has also become apparent that thedistribution centre in Northfleet may not be required and, subject toconsultation, the site will close in April 2006. Outlook "Our sales momentum is allowing us to deliver continuing improvements in thecustomer offer but we are still incurring additional costs as we embed newprocesses for long-term and sustainable change to our operations. We expect themarket to remain highly competitive during quarter four when we will also be upagainst tougher comparative figures with the annualisation of sales growth underour recovery plan. Investment in the customer offer remains at the heart of allour activities and as previously stated, it is anticipated that the benefits ofoperational gearing in the business will begin to be delivered in the secondhalf of 2006/07." Notes (1) Certain statements made in this announcement are forward lookingstatements. Such statements are based on current expectations and are subjectto a number of risks and uncertainties that could cause actual results to differmaterially from any expected future results in forward looking statements. (2) As measured by TNS on a 12 week basis compared with the previous yearsince January 2005. (3) Sales growth is detailed below:2005/06 Q1 Q2 H1 Q3 (4) Sales growth including petrol (%)Total 5.7 6.6 6.2 5.6Lfl 1.9 4.1 3.1 4.8Sales growth excluding petrol (%)Total 5.3 5.4 5.3 5.9Lfl 1.3 2.8 2.1 5.2 (4) The comparative numbers (Q3 2004/05) have been adjusted to reflect anormal Saturday trading rather than a reduced New Year's Day trade. This hasthe effect of reducing this quarter's reported growth numbers and betterrepresents the underlying sales performance. This adjustment is consistent withthe approach employed in making the Easter adjustment in the first half of 2005/06. (5) The new bread is available in white, wholemeal and brown and will replaceSainsbury's current own-brand standard, sliced loaves. The white bread containsdouble the amount of fibre of the previous line, the brown 30% more fibre andall varieties have 15% less salt than before. The bread also containsHi-MaizeTM, a great source of natural dietary fibre and resistant starch, whichcan be easily added to foods without changing their taste, texture orappearance. The bread remains at 43p. As it is a standard line, the opportunityto make a healthier choice is widely available for all customers. (6) Store details are: Stores New Acquisitions Extensions Refurbishments Conversions Total Supermarkets 1 9 4 12 26Convenience 2 10 13 25 (7) The last store acquired from Morrisons in 2004/05, Team Valley, openedin March 2005. (8) Sainsbury's will announce its fourth quarter trading statement on 29March 2006. (9) We will be holding a conference call for analysts and investors at 9:15(GMT). To listen to the audio webcast: please visit www.j-sainsbury.co.uk from8:45 (GMT) and follow the on-screen instructions. The archive of this eventwill be available from 12:00 BST on the day in the form of a delayed webcast.To view the transcript of the conference call, go to www.j-sainsbury.co.uk on 16January 2006. Enquiries: Investor relations Media+44 (0) 20 7695 7162 +44 (0) 20 7695 6127Lynda Ashton Pip Wood This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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