Page last updated at 10:40 GMT, Thursday, 7 January 2010

Sainsbury's hails 'strong' Christmas trading

Justin King: 'We think the economic conditions will remain tough and challenging'

Supermarket group Sainsbury's says it has enjoyed "strong trading" over the past three months and saw a "record" performance over Christmas.

Like-for-like sales, which exclude new store openings, were up 3.7%, excluding fuel, in the 13 weeks to 2 January.

Excluding fuel and VAT, like-for-like sales rose by 4.2%.

The retailer said it was continuing to perform well in what remains a "challenging" environment, adding that it was "well placed" for 2010.

"Sainsbury's has delivered a strong trading performance over the past 13 weeks," chief executive Justin King said.

Customers were looking for a "more traditional Christmas", he said, with sales of turkey and trimmings up 14% on last year.

The trading figures were at the top end of analysts' expectations, and shares in Sainsbury's were up 6.2p, nearly 2%, at 324.2p in morning trade.

Delayed deliveries

Mr King added that the efforts of staff to get into work in the snow had been "quite extraordinary".

[Sainsbury's] echoed the doubts expressed by most other consumer facing businesses at the moment regarding the challenging nature of the consumer horizon
Richard Hunter, Hargreaves Lansdown Stockbrokers

However, he said those that could not get in would not get paid.

"Our normal policy is that if you are not able to work a shift you are not paid for it, but what we do is provide our colleagues with the opportunity some time in the following month to make those hours up at a time that suits them," he told the BBC.

On Wednesday, all Sainsbury's stores were open and all deliveries were made, and Mr King said he expected that to be the case on Thursday, though he admitted some deliveries might be delayed.

There had been a little bit of panic buying, with some customers stocking up on canned goods, but on the whole people had been "pretty sensible", he said.

Cautious outlook

Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, said while the trading update was "impressive", there remained a number of concerns for investors.

"Sales were above expectations, and sliced in different ways there were signs of a very robust performance," he said.

"However, the company also echoed the doubts expressed by most other consumer facing businesses at the moment regarding the challenging nature of the consumer horizon."

Other retailers have also warned about the prospects for 2010, despite reporting strong Christmas trading.

On Tuesday, John Lewis reported record sales for the Christmas season, with like-for-like sales up 12.7% in the five weeks to 2 January at its department stores. However, it said this performance was unlikely to be sustained.

On Wednesday, Marks and Spencer reported a 0.8% rise in UK like-for-like sales for the three months to Boxing Day.

M&S chairman Sir Stuart Rose said the firm had seen a "good Christmas", but added that trading in 2010 would be tough.

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Sky News Pay Freeze: Absent Staff Left Out In Cold - 5 hrs ago
Telegraph Sainsbury - Britain 'yet to face realities of recession' - 6 hrs ago
The Scotsman Sainsbury's hails 1.5m extra shoppers - 11 hrs ago
BusinessWeek Sainsbury Tops Estimates on Holiday Lift - 16 hrs ago Viewpoint: Sainsbury's joins the space race - 16 hrs ago

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