LEX Sainsbury has had its time in the sun, but clouds are drifting over the horizon. First-half underlying pre-tax profits up 18 per cent to £307m are testament to the turnround under chief executive Justin King – and the UK number three grocer’s skilful navigation through the recession. As the most upmarket of Britain’s “big four” supermarket chains, it might have been hardest hit. Instead, its like-for-like sales increases outstripped rivals. But like-for-like growth of 7.8 per cent in the April-June quarter gave way to 5.4 per cent in July-September. And two industry measures on Tuesday suggested Sainsbury is now seeing the big four’s slowest sales growth, with arch-rival Tesco regaining form.
There is a mathematical effect here: Sainsbury is bumping up against testing prior-year comparisons. But for now, the sales momentum is shifting elsewhere. And the threat comes not just from Tesco. Sales at number four Wm Morrison are powering ahead as its continues to recover from the aftermath of its Safeway merger, fuelled by new store acquisitions. The fastest recent gainer is upper-crust Waitrose – outside the big four – also helped by new stores. Even Marks and Spencer is seeing food sales recover.
