Sainsbury’s campaign to boost business failed to hit its target the supermarket chain admitted today.
The group unveiled trading figures showing slow growth in its Sainsbury’s and Savacentre supermarkets.
And it said its focus on price competition had hit gross margins.
Like-for-like sales rose just 1.2% at Sainsbury and 0.4% at Savacentre in the 19 weeks to January 30.
Dino Adriano, group chief executive, said: “In a market that was more competitive and growing at a lower level than anticipated, our `Value to Shout About’ campaign achieved the objective of improving customers’ perceptions of value but did not meet our sales target.”
Adriano added that the policy of keeping prices competitive with rival supermarkets had put pressure on the group’s margins.
The disappointing performance at Sainsbury’s food business was compensated for by a relatively strong performance by the group’s DIY business.
Like-for-like-sales were up 4.3% at Homebase and 3.7% at Shaw’s, ahead of the industry average.
Over the year to January 30 the figures also showed a robust DIY business being offset by weaker food sales. At Homebase like-for-like sales were up 4.4% on the previous year, while Sainsbury supermarket sales were up 2.4% and Savacentre sales up just 1.4%.
The group said its recently launched banking business was performing in line with expectations.
EGi News 05/02/99
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