Sainsbury's claims festive prize after record sales leap

Sainsbury's has declared itself the "Christmas grocery winner" after posting record third-quarter sales ahead of City expectations, as hard-pressed customers treated themselves to champagne and premium turkeys.

The grocer also said growth at its convenience stores had outstripped its bigger supermarkets and that general merchandise sales continued to grow ahead of food, boosted by strong demand for its Tu womenswear designed by the TV celebrity Gok Wan.

Chief executive Justin King pointed out that unlike its listed grocery rivals, Tesco and Morrisons, it was reporting a full quarter, as opposed to just the "shorter, bouncier" Christmas period. Sainsbury's posted a 2.1% rise in underlying sales over the 14 weeks to 7 January, which was ahead of City forecasts of a
2% rise.

King said: "Quite clearly that result places us as the Christmas winner in grocery." Morrisons had posted a sharp slowdown in its sales growth to 0.7% over the six weeks to 1 January.

King said: "We are a good stretch ahead of Morrisons on any comparable basis," adding this was supported by Kantar's recent industry data.

However, when the combined 1.6% positive impact from VAT and store extensions are stripped out, Sainsbury's underlying sales only grew by 0.5%, in line with Morrisons.

Tesco is expected to confirm its status as the festive laggard of the so-called big four, including Asda, tomorrow by posting UK underlying sales down by up to 2%.

Sainsbury's said customers had traded up to "special products" over Christmas, with champagne sales up 10% and its Taste the Difference items, such as its Norfolk Black Free Range turkeys, growing by a similar amount.

But its Basics value range also "grew strongly", showing how cash-strapped shoppers are carefully managing their finances.

Total sales rose by 4.5%, excluding fuel, driven by a 1.5 million rise in customer transactions to a record 26 million over the seven days to
24 December.