Sainsbury’s food sales buoyed by own label

Sainsbury’s strong own-label offering buoyed its food sales in the first quarter, the retailer has revealed.

The supermarket said today its premium Taste The Difference range grew by 10% in the 12 weeks to 8 June and had now reached £1bn in sales.

Its 6,500-strong mid-tier range bySainsbury’s – which the retailer recently finished overhauling – grew by nearly 7%.

“If our 12 weeks shows our level of promotion is down, it’s because we have been driving own-label and not necessarily promoting brands”

Justin King, Sainsbury’s

Own label accounts for around half of Sainsbury’s food sales.

Speaking on a conference call for journalists this morning, CEO Justin King admitted all growth in grocery had come from own-label during the period. “By definition, everything else we sell has been flat,” he said.

“Own-label is a key part of our point of difference. Own-label competes with brands and after finishing bySainsbury’s, we have been promoting it in store. So if our 12 weeks shows our level of promotion is down, it’s because we have been driving own-label and not necessarily promoting brands.”

The retailer had particular success with the relaunch of its Sainsbury’s Little Ones nappies to coincide with the withdrawal of the Huggies brand from the UK, which King said was “offering customers an equivalent quality product for a significant saving”.

However, not all own-label was a hit. King said sales of its value range Basics were “about flat” in the quarter.

King was also pulled up on his pessimistic outlook for the economy, saying “we expect the challenging economic environment to continue through this financial year”.

But he told journalists: “Are there good signs heading in the right direction? Absolutely. But the consumer view remains resolutely down and we don’t think there will be radical changes in consumer behaviour.

“What we’ve been doing is to help them Live Well For Less, and what they’ve been doing – like wasting less food and eating more as a family – are all good habits that they will stick with.”

He also joined Tesco CEO Philip Clarke in calling for a level playing field between online and traditional retailers.

“Clearly, a tax that benefits one channel and burdens another is unsustainable in the long run. The government needs to create a level playing field at a local level in some way.”

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