Christmas boost for Sainsbury's

Sainsbury's has delivered a better than expected 3.7 per cent rise in Christmas trading.

But UK's third largest supermarket chain warned there would be tough times ahead as consumers tightened their belts.

The company said more than 21.5 million customers shopped at its stores in the week before Christmas, helping drive the third quarter sales hike.

But it said consumer budgets were "clearly under pressure" and admitted the group faced stiff competition from rivals.

On Wednesday, market share figures for the sector suggested that Sainsbury's sales lagged behind competitors Tesco, Asda and Morrisons over the Christmas period.

But Sainsbury's 3.7 per cent lift in like-for-like sales, excluding fuel, was marginally higher than the 3.6 per cent forecast in the City.

It also comes in stark contrast to the shock 2.2 per cent drop in sales revealed on Wednesday by Marks & Spencer, which sparked fears of a downturn for the retail sector. M&S food sales were 1.5 per cent lower.

Justin King, chief executive of Sainsbury's, said the sales growth was "particularly pleasing given the level of competition".

He added the group's recent strategy changes under its three-year Making Sainsbury's Great Again recovery plan should help it weather the "challenging" trading conditions.

The group reported like-for-like sales including petrol up 5.1 per cent in the three months to December 29.

Online sales saw growth of more than 40 per cent over the quarter, with the group delivering 90,000 orders in the week before Christmas - a 50 per cent rise on last year.

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