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Sainsbury’s reports first quarterly sales growth in two years

Sainsbury’s has released its first quarterly sales growth in two years, growing by 0.1%, as the supermarket is expected to make a new bid for Home Retail Group later this week.

The majority of the growth came from online, with a 14% rise in online grocery sales, a 10% rise in sales of clothing, and an 11% increase in sales of entertainment products. Sales at the company’s large supermarkets were flat (1).

Mike Coupe, Sainsbury’s CEO, claimed the group had delivered “strong performance”, but warned that the sector would continue to be competitive as lower food prices impacted sales growth (2). Price competition led from discount chains Aldi and Lidl have strongly impacted the sector’s profitability.

The ‘big four’ supermarket chains appear to be adjusting to the new paradigm, as Tesco and Morrison’s have been posting same-store revenue increases under new leadership. Asda, however, remains in decline (3).

Sainsbury’s will report its annual results in May. The supermarket has reported that it maintained market share in the period (4). There was no update on the bid for Home Retail Group; both Sainsbury’s and rival bidder Steinhoff International have until Friday to make a firm bid or walk away.

1. http://www.theguardian.com/business/2016/mar/15/sainsburys-sales-rebound-boosts-home-retail-group-prospects
2. http://www.telegraph.co.uk/business/2016/03/15/sainsburys-toasts-sales-rise-ahead-of-argos-bid-deadline/
3. http://www.bloomberg.com/news/articles/2016-03-15/sainsbury-posts-first-quarterly-sales-increase-in-two-years
4. http://www.bbc.co.uk/news/business-35809517