J Sainsbury, Britain’s third largest super-market chain, posted its highest quarterly profits since 2001 in the third quarter of this year. However, its banking division would be registering a loss in the first half of the year.
Last October, Justin King, chief executive of J Sainsbury flagged off a revolutionary three-year plan for its upturn when the group had its first ever full-year loss. The sales at stores, excepting in the gasoline sector, showed an increase of 2.8 percent in the last four months. The overall sales registered a growth of 5.4%.
According to Mr King, the chain managed to cut into the market share of its competitors including Asda and Tesco. "As previously stated, we will continue to invest in both price and quality and in our store execution in order to improve our customer offer," he said. The shares grew 6 pence and stood at 286 pence on Friday.
Last month, Sainsbury's launched a £10 million ad campaign featuring celebrity chef Jamie Oliver with the punch line, "Try Something New Today".
Though the banking division is posting losses, the company is confident of a turnaround. The customer base there has reportedly grown by over 18 per cent
Though the sales surpassed expectations, analysts feel its still early days to declare a complete reversal in fortunes. According to David McCarthy of Citigroup: "The improvement in underlying sales has been driven by some price investment and by 'easy' improvements in availability that you would expect in the early stages of a recovery. Indeed, it is still too early to call any major recovery."
Mr King, as a part of augmentation drive, is increasing staff, redecorating the stores and cutting prices. Sainsbury has set itself a target of increasing its sales by 2.5 billion pounds by 2007.
Posted
on : Sat, 08 Oct 2005 11:15 GMT | Business News
By : Chris Rowe
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