Sainsbury gains market share from Tesco

The company admits that it is has been burdened by its reputation as a southern-based premium shop since the 1980s. However, Justin King, the chief executive said it had now had "universal customer appeal". "This is a marathon, not a sprint. You change perceptions over a very long period of time. Of course that perception was never true. You can't attract 20m customers a week and be anything other than pretty universal. But what we've managed to do is appeal whatever the budget." Sales of its Basics range of cheap products increased by 10pc in the final quarter of its financial year to March 17, while sales of its Taste the Difference ranges increased by 20pc. Mr King said he was particularly pleased that its strength in its Taste the Difference premium range had continued after Christmas into January and February. "It demonstrates this challenge of saving money week in week out so [customers] can still enjoy special occasions. It's not just a challenge for Christmas." The company said sales from stores open at least a year rose 2.1pc in the 10 weeks to March 17, excluding fuel, compared with a year ago. After 0.8 percentage points of growth from store extensions are stripped out, however, underlying sales for the quarter rose 1.8pc. This is agreed by analysts to be stronger than the muted growth enjoyed by Morrisons and Asda and the drastic slip in sales growth at Tesco's UK shops. Clive Black at Shore Capital said: "Sainsbury has delivered what can only be considered a very sound and resilient performance against the backdrop of demonstrably challenging times." He added that its Brand Match promotion, which gives customers coupons if they could have brought branded goods cheeper elsewhere, had proved very successful. "he company has managed to trade through the real and perceived relative deficiencies in its price file through a series of initiatives and tactics that we believe has made its customers more loyal through reassurance." Simon Chinn at Conlumino, the retail consultancy, said: "In many ways, Sainsbury’s is succeeding where Tesco is failing: namely through offering good prices without sacrificing its quality credentials. Inevitably, Sainsbury’s has been a beneficiary of Tesco’s current problems and we think it is well placed to make further market share gains over the next six months.