Sainsbury's misses quarter four target as times get tough

City A.M. Reporter
J Sainsbury, the third-biggest supermarket group, missed fourth-quarter sales forecasts and said trading was likely to remain tough as shoppers face rising fuel prices and government spending cuts.

The group, which trails Wal-Mart's Asda and industry leader Tesco by annual sales, said on sales at stores open over a year rose one per cent, excluding fuel but including VAT sales tax, in the ten weeks to 19 March.

That was down from 3.6 per cent growth in the previous quarter and compares with an average forecast rise of 2.4 per cent in a Reuters poll of 10 analysts.

"We expect the consumer environment to remain tough, with our customers facing fuel price inflation, uncertain employment prospects and government spending cuts," Sainsbury's said, adding its performance was better than the wider grocery market.

Sainsbury's has been growing sales faster than most of its rivals for several quarters, helped by its strength in the more affluent south of England as well as its expansion into online and convenience shopping and non-food ranges like clothing.