Sainsbury's and Marks & Spencer dazzled the City with the latest year-on-year sales growth ahead of Tesco and Asda.
In the 12 weeks to 8 August [Kantar Worldpanel] Sainsbury's posted year-on-year sales growth of 5.5% , while M&S recorded growth of 6%. Tesco grew by 3.2% and Asda by 1.9%.
While Waitrose (10%) and Morrisons (5.9%) both posted even higher sales growth, analysts said M&S and Sainsbury's had exceeded City expectations.
The World Cup boosted the performance of both retailers, with Sainsbury's selling all of the 50,000 vuvuzelas it stocked for the tournament.
"The key winner this month was M&S, which outperformed peers and came in much stronger than we expected, so should be taken well for the stock," said Geoff Ruddell, analyst at Morgan Stanley. "It provides further evidence that the initiatives put in place over the past couple of years are working. Sainsbury's also continued to grow faster than the industry."
Asda's sluggish growth came as the supermarket revealed like-for-like sales had fallen 0.4% excluding fuel in the second quarter, with total sales growth "in the low single digits".
CEO Andy Clarke also admitted Asda's food quality "is something Asda hadn't been as focused on in the past as it should have been."
However Ruddell said that retail rivals should brace themselves for a fightback by Asda. "This will inevitably lead to concerns that it will do something radical, and potentially damaging to industry profitability, to improve its performance," he said.
In the 12 weeks to 8 August [Kantar Worldpanel] Sainsbury's posted year-on-year sales growth of 5.5% , while M&S recorded growth of 6%. Tesco grew by 3.2% and Asda by 1.9%.
While Waitrose (10%) and Morrisons (5.9%) both posted even higher sales growth, analysts said M&S and Sainsbury's had exceeded City expectations.
The World Cup boosted the performance of both retailers, with Sainsbury's selling all of the 50,000 vuvuzelas it stocked for the tournament.
"The key winner this month was M&S, which outperformed peers and came in much stronger than we expected, so should be taken well for the stock," said Geoff Ruddell, analyst at Morgan Stanley. "It provides further evidence that the initiatives put in place over the past couple of years are working. Sainsbury's also continued to grow faster than the industry."
Asda's sluggish growth came as the supermarket revealed like-for-like sales had fallen 0.4% excluding fuel in the second quarter, with total sales growth "in the low single digits".
CEO Andy Clarke also admitted Asda's food quality "is something Asda hadn't been as focused on in the past as it should have been."
However Ruddell said that retail rivals should brace themselves for a fightback by Asda. "This will inevitably lead to concerns that it will do something radical, and potentially damaging to industry profitability, to improve its performance," he said.
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