By Peter Campbell
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Sainsbury’s won a resounding victory over Tesco yesterday when it unveiled a boost in sales.
In the 12 weeks to June 9, its underlying sales rose by 1.4 per cent compared with the same period last year.
In contrast, rival Tesco earlier this week admitted that sales over three months fell by 1.5 per cent, although its reporting period did not include the Diamond Jubilee week.
Checking out growth: Sainsbury's underlying sales rose by 1.4 per cent
But despite the good news, Sainsbury’s shares fell by nearly 3 per cent yesterday (to finish 7.6p lower at 283.6p) after the performance failed to live up to expectations.
According to analyst Philip Dorgan at Panmure Gordon, the company had been expected to grow sales between 1.5 per cent and 2.2 per cent â€" although he said the drop in share price was an ‘over-reaction’.
Sainsbury’s sales growth was boosted by its smaller stores, which grew by 16 per cent, and online, which increased trading by a fifth. Its clothing division â€" which is growing faster than food â€" saw its rate of expansion slow in the period.
But in a surprising move the group did not break out its sales from the Diamond Jubilee week, which was included in the period.
This led to accusations that it underperformed in the run up to the public holidays â€" a week in which Tesco (down 0.1p to 303.95p) made £1bn of sales.
But Sainsbury’s chief executive Justin King said: ‘To focus on the idea that the Jubilee was the story would be a mistake.
‘It was a record week outside of Christmas, but we’re reporting a 12-week period here, not just one.’
He added shoppers were being ‘savvy’ to save money so that they could ‘treat themselves on special occasions’.
King also used the results to decry George Osborne’s flailing over VAT on pasties and hot food.
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