Sainsbury(J) PLC
29 March 2006
29 March 2006
Fourth Quarter Trading Statement for 12 weeks to 25 March 2006
Highlights
• Fourth quarter total sales up 6.7 percent (6.5 percent excluding
petrol) (3)
• Fourth quarter like-for-like sales up 5.7 percent (5.3 percent
excluding petrol) (3)
• Fifth quarter of consecutive like-for-like sales growth
• Customer numbers grown by over one million during second half
• Ongoing investment in customer offer with grocery deflation at 2.2
percent
Trading
Justin King, chief executive, said: 'This has been a significant quarter for
Sainsbury's with like-for-like sales excluding petrol up 5.3 percent giving us
our fifth consecutive quarter of sales growth. This is an important stage in our
recovery and we are pleased that our progress is also confirmed by good market
share growth over the same period of time (4). We have delivered a solid first
year and are on track in our Making Sainsbury's Great Again plan but still have
a long way to go. The sales growth announced today shows that customers are
noticing the many improvements we have been making to our business. Over 16
million customers are now shopping in our stores each week, an additional one
million in the last six months.
'There was 2.2 percent deflation in grocery during the quarter as we have
continued to ensure our pricing position is maintained and strengthened with
over 1,000 prices lowered in the last 12 weeks.
'As announced on 21 March 2006, Tim Pile stepped down as chief executive officer
of Sainsbury's Bank. Trading at the Bank remains in line with the previous
guidance issued at our Interim results last November.
Making Sainsbury's Great Again
'In February we launched our Active Kids programme for the second year. This
provides schools with sporting equipment and experiences in return for vouchers
earned in store. We attracted 25,000 schools in 2005, 80 percent of all UK
primary and secondary schools, and donated over £17 million of sports equipment.
The 2006 scheme has started strongly with 30,000 schools and nurseries now
registered.
'We are committed to giving customers great products at fair prices. We have
continued to invest in raising quality standards and developing products that
provide customer benefits such as bagged salad, which has been washed in natural
spring water. We launched our Kids range in February becoming the first retailer
to provide Guideline Daily Amounts (GDAs) for children aged 5-10 years on
product packaging. This is being extended across other own brand products. Our
Wheel of Health icon, launched in January 2005 and which uses a multiple traffic
light approach, is now on 1,200 products and is fully endorsed by the FSA.
'Our SO organic range, launched last September, has helped us grow our own-brand
market share and regain the number one market position earlier this month. In a
market first we are also selling milk from British farms converting to organic
standards. The rising demand for organic milk currently outstrips UK supply so
we are working with farmers to cover the additional associated costs during
conversion as well as offering 12-month supply contracts once the milk is
organic. Sainsbury's is a long-standing supporter of the Fairtrade mark and the
UK's leading Fairtrade supermarket. We achieved our best ever week with sales
of over £1 million during Fairtrade Fortnight and have introduced many new
products such as the UK's first Fairtrade baby food. In February we placed the
UK's single largest Fairtrade cotton order for 200,000 T-shirts in support of
our sponsorship of Sport Relief this July.
'Roger Burnley joined us in January 2006 and now has full accountability for our
supply chain. Lawrence Christensen will continue to work with us on a part-time
basis. Over the last 18 months Lawrence has driven immense change resulting in
huge improvements in the effectiveness of our supply chain operations and in
product availability for our customers. During the quarter we opened three new,
extended one and refurbished 12 supermarkets. We also opened nine and
refurbished 22 convenience stores.
'Last week we announced that we had completed our refinancing transaction. A
total of £2.07 billion was raised through the issue of two Commercial Mortgage
Backed Securities and we purchased all outstanding unsecured bonds. At the same
time we made a payment of £110 million into our pension schemes, with the
balance of the £350 million one-off contribution expected to be paid in May
2006.'
Notes
(1) Certain statements made in this announcement are forward looking
statements. Such statements are based on current expectations and are subject
to a number of risks and uncertainties that could cause actual results to differ
materially from any expected future events or results referred to in these
forward looking statements.
(2) Sales growth is detailed below:
2005/06 Q1 Q2 H1 Q3 Q4 H2 FY
Sales growth including petrol (%)
Total 5.7 6.6 6.2 5.6 6.7 6.1 6.1
Lfl 1.9 4.1 3.1 4.8 5.7 5.3 4.1
Sales growth excluding petrol (%)
Total 5.3 5.4 5.3 5.9 6.5 6.2 5.8
Lfl 1.3 2.8 2.1 5.2 5.3 5.3 3.7
(3) To reflect the underlying sales growth, where appropriate, adjustments
have been made to the comparative numbers:
- Q1 2004/05 was adjusted for Easter
- Q3 2004/05 was adjusted to reflect a normal Saturday trading rather
than a reduced New Year's Day trade.
- Q4 2004/05 has been adjusted to reflect a reduced trading day at the
start of the period similar to New Year's Day. In addition the
comparatives have been adjusted for Easter, as Easter does not fall
in this reporting period, whereas last year the quarter ended on
Saturday of the Easter period
(4) As measured by TNS on a 12 weekly basis compared with the previous year
since January 2005. This shows 15 consecutive periods of market share growth.
(5) Sainsbury's will announce its Preliminary results for the year ended 25
March 2006, on 17 May 2006.
(6) We will be holding a conference call for analysts and investors at 8:45
(BST). To listen to the audio webcast: please visit www.j-sainsbury.co.uk from
8:15 (BST) and follow the on-screen instructions. The archive of this event
will be available from 12:00 BST today in the form of a delayed webcast. To
view the transcript of the conference call, go to www.j-sainsbury.co.uk on 31
March 2006
Enquiries:
Investor Relations Media
Lynda Ashton Pip Wood
+44 (0) 20 7695 7162 +44 (0) 20 7695 6127
This information is provided by RNS
The company news service from the London Stock Exchange
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