Sainsbury will overtake Asda to become the number two supermarket by sales in 2006 if the current rates of growth at both retailers continue, says chief executive Justin King.
“If Asda doesn’t grow, which it hasn’t been doing, and we continue as we are, then it would happen some time next year,” insisted King.
His bold claim came as Sainsbury unveiled a third consecutive quarter of growth, with life-for-like sales excluding petrol, up 2.8%. The figures were the best from Sainsbury since Christmas 2001, but that was against a far more buoyant market than today, said King.
Health and beauty also provided a great opportunity for Sainsbury to push into more, said King. “We’ll also open 50 pharmacies this year; no one will be opening more than us.”
Although non-food is still a comparatively small part of
Sainsbury’s business, King said that Christmas would be an important step in its growth.
He said: “We’ve already got four times more merchandise around Halloween and Bonfire Night than last year.
“Over the cut and thrust of the next few months there will be lots of price cuts as people prepare for Christmas.”
King also outlined his confidence that the legal bid by the Association of Convenience Stores to force the OFT to ditch its two-market definition would not change the shape of the grocery sector. “Lots of people have been asked to express their views. This is a highly competitive market that acts in the interests of consumers.
“This sector has already been investigated as much as any market ever could be and twice they’ve said it’s OK.
“It’s for the government to decide if the market is operating in the interests of consumers and competition.
“But it’s right to be nervous about competition.”
The ACS’s case goes before the Competition Appeal Tribunal on November 1.
Separately, Sainsbury will launch a new customer loyalty magazine next week called Fresh Ideas, targeted at 1.5 million Nectar members who have used their card at least once in the past month.
Rachel Barnes