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Last updated: November 14, 2012 8:54 pm
Justin King, chief executive of J Sainsbury, insisted he had no plans to leave Britain’s third-biggest supermarket chain by market share over the next year.
Mr King will have been chief executive of J Sainsbury for nine years in March, and is the longest-serving chief executive among Britain’s big four supermarket chains.
“I have no plans to leave in the next year,” he said. “I do understand that after a person is in the same job for eight or nine years and doing a good job that speculation arises. I am very happy at Sainsbury,” he added.
The comments came as a combination of discount coupons, the promotion of own-label products, and more convenience-sized stores pushed up sales at Sainsbury, helping it outpace rivals Wm Morrison and Tesco.
Sainsbury reported a 1.7 per cent increase in sales from stores open at least a year in the 28 weeks to September 29, although roughly half of this came from store extensions.
Mr King said that excluding online transactions and those from convenience stores, sales from its core supermarkets not invested in over the past 12 months experienced flat sales. But he believed they were “performing better than our grocery competitors”.
He also urged George Osborne, the chancellor, to act to boost jobs in the forthcoming autumn statement, by easing the national insurance burden on employers.
“If the government wants to invest money in a way that is good for the economy, we think there is no better way than incentivising employment,” he said.
He added that National Insurance was a “tax on jobs”, and that the government was not doing enough to encourage employment. It should consider a 12-month national insurance holiday for new employees, and for any employees under the age of 25, he said.
Such measures would “tip the scale in favour of a new employee, and what you will get is a lot of companies saying: I will take that little risk”, he said.
Mr King said he expected Britons to splash out at Christmas on quality food, but for January to see “some battening down to rebalance the books”.
Britons were planning their Christmas shop, he said, and spreading the cost, with demand for toys already strong.
However, he said he expected the economic situation to remain “challenging”, helping send the company’s shares down more than 2 per cent to 338.8p. Inflation outstripping wage growth once more would “put further pressure on household budgets”.
First-half sales, excluding VAT, rose 4 per cent year-on-year to £12.2bn, while pre-tax profit rose 2.5 per cent, from £395m to £405m.
Excluding exceptional costs, underlying pre-tax profit rose 5.4 per cent to £373m, ahead of analysts’ consensus forecasts of £371m.
Diluted earnings per share increased from 15.9p to 16.8p. The interim dividend was raised 6.7 per cent to 4.8p.
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