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Supermarket sales grow again; J Sainsbury returns to growth

“The grocery market seems to have finally edged out from under the shadow of 2018 and tough comparisons with the strong summer sales of last year," Kantar said

J Sainsbury PLC - Supermarket sales grow again but Sainsbury's is the only one of the big four to see its top line rise
The future is orange

Supermarket giant J Sainsbury PLC (LON:SBRY) saw a return to sales growth over the last 12 weeks, according to the market research group, Kantar.

The latest grocery market share figures from Kantar show year-on-year supermarket sales growth accelerated in the 12 weeks to 6 October.

Sales grew by 1.3% in the latest 12 weeks, an improvement on the 0.5% increase seen in the previous Kantar release, which covered the 12 weeks to 8 September.

Sainsbury's was the only supermarket of the “big four” to achieve sales growth, however, with sales up 0.6% year-on-year (YOY); its market share was unchanged from a month earlier at 15.3%.

The performances of Tesco PLC (LON:TSCO), Asda and Wm Morrison Supermarkets PLC (LON:MRW) all improved from the figures in the September release but sales were still down YOY.

Tesco's sales declined by 0.2%, having been down 1.4% in the 12 weeks to 9 September but its market share improved to 27.0% from 26.9% in September.

“The announcement that Dave Lewis will depart as Tesco chief executive next year has inspired inevitable reflection on his tenure and it’s worth noting that the retailer’s sales were in freefall when he joined in September 2014 – dropping 4.5% year on year. Since then Tesco’s absolute and relative performance has improved and profitability has returned, but its market share is down from 28.8% at the start of his time there,” observed Fraser McKevitt, the head of retail and consumer insight at Kantar.

Asda's sales fell 0.9% and its market share fell to 15.0% from 15.1%; Morrisons' sales were 1.8% lower and its market share was unchanged at 9.9%.

Once again, the German hard-discounters grew like billy-o, with Aldi's sales up 7.3%, leaving its market share at 8.1%, while Lidl's sales were up 8.2%, leaving its share unchanged at 6.0%.

“The discounters now account for a combined 14% of UK grocery sales which is 0.8% percentage points higher than last year, an increase that’s worth nearly one billion pounds annually. While traditionally known for its own-label ranges, Lidl’s 8.2% growth was boosted by sales of branded goods which grew twice as quickly,” McKevitt said.

It was also a good period for the Co-op, which saw sales rise 3.9% YOY - it’s fastest growth rate since April; its share was unchanged at 6.6%.

Waitrose, part of the John Lewis Partnership, saw sales decline 1.1%, despite which Kantar reported its market share improved to 5.1% from 5.0% last month.

Ocado Group PLC's (LON:OCDO) share remained small at 1.4% (unchanged) but it continues to show strong growth, with sales up 13.3%.

McKevitt believes concerns about Brexit and the availability of favourite products have not yet led to panic buying.

“Sales of dry pasta and healthcare products over the past four weeks were 9% and 7% higher than the same time last year, but those of canned products fell by 2% and frozen food by 1%. While a quarter of British consumers say they are considering stockpiling, it seems they are waiting to see how the next few weeks play out and we expect if they take any action it will be closer to the deadline if a chaotic trading situation looks increasingly likely,” McKevitt said.

Britain is supposed to leave the EU at the end of October – on Halloween. Shoppers seem more concerned about stocking up on pumpkins for Halloween – sales of the orange gourd were up 29% year-on-year – than they do on hoarding things that might be in short supply following Brexit.

Shares in J Sainsbury were little changed; Tesco’s shares were up 0.8% while Morrisons’ shares were 0.4% higher. Ocado seems to have been the big winner, with its shares 2.4% firmer.

Quick facts: J Sainsbury PLC

Price: 190.3 GBX

Market: LSE
Market Cap: £4.23 billion

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