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There is no mention of an improved offer for Argos in Sainsbury’s (SBRY) fourth quarter trading update ahead of Friday’s ‘put-up-or-shut-up’ deadline but the supermarket managed its first positive quarterly like-for-like sales growth for more than two years.

Total retail sales in the nine weeks to 12 March 2016 were up 1.2% (excl. fuel) – and 0.5%(inc. fuel) – with like-for-like figures up just 0.1%.

CEO Mike Coupe said: “We have delivered a strong performance this quarter. Our supermarkets recorded both like-for-like transaction and volume growth and we continue to exceed our internal metrics for service and availability. We also maintained our market share in the quarter. The market will remain competitive as food deflation continues to impact sales growth.”

He added Sainsbury’s launched a number of vegetable-based product innovations, including boodles (butternut squash noodles) and courgetti (spiralized courgette), to cater for demand for healthy eating in the new year, which were “proving extremely popular”.

Promotional levels continued to reduce year-on-year, running at an average of 28% for the quarter. Sainsbury’s has already committed to phasing out the vast majority of its multi-buy promotions across grocery products by August this year.

The retailer opened 16 convenience stores, including a second micro store in Richmond, in the period.

Online sales grew at almost 14% and orders by nearly 19%; clothing delivered more than 10% growth; and Sainsbury’s Bank continued its good performance with 15% volume growth in insurance new business and 12% growth in travel money in-store transaction volumes.

“We have traded well this year and are making excellent progress implementing our strategy,” Coupe said. “The market will remain competitive but we are confident that we will continue to outperform our major peers.”

Shares in Sainsbury’s, which have been on the up recently, have fallen 1,1% this morning to 277.4p. Coupe will be hoping investors push up the price throughout the day to give its cash-and-shares offer for HOME Retail Group more weight.

Morning update

Ocado (OCDO) improved group gross sales by 15.3% to £312.4m in the first quarter to 21 February, with growth of 13.8% to £286.7m excluding revenue from the Morrisons agreement. Average orders per week also climbed 16.9% to 214,000 in the 12-week period but basket size continued to shrink at the online grocer, falling 2.9% to £111.41. There was no mention of how talks to sign up a first international partner were going.

CEO Tim Steiner said: “We are pleased with the steady progress in our business, maintaining double-digit sales growth in a retail environment that remains challenging, and post period end we shipped over 250,000 orders in a single week for the first time.

“We believe our focus on customer satisfaction and commitment to improving what we offer to consumers through innovation and our proprietary IP will support further growth. Notwithstanding the tough nature of the marketplace, we expect to continue growing ahead of the online grocery market.”

Ocado’s share price has opened 0.5% higher to 262.8p on the quarterly trading update. Elsewhere, the FTSE 100 is down 0.7% to 6,130.8 pointswith most grocery and fmcg stocks following suit.

Yesterday in the City

Fever-Tree (FEVR) saw shares climb back towards 600p after it revealed impressive growth figures in its full-year results. The premium mixer business pushed up sales in the year to 31 December 2015 by 71% to £59.3m after growth in all regions. The stock finished the day up 2.3% to 596p.

Other climbers included C&C Group, up 3.9% to €3.90, Carrefour, up 2.8% to €24.51, and Marks and Spencer (MKS), up 2.7% to 408.8p.

There weren’t many losers on a generally good day for food and drink stock as the FTSE 100 rose 0.6% to 6,174.6 points, but Poundland (PLND) ended the day down 1.4% to 160.9p, Finsbury Food (FIF) was down 0.5% to 110p ahead of results later this week, and Greencore (GNC), was down 0.9% to 346p.

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