Sainsbury’s Christmas Sales Boosted by Luxury Food Range but Growth Slows Reuters

British grocer J Sainsbury revealed that Christmas sales were boosted by its Taste the Difference luxury food range, as well as customers redeeming loyalty points and shopping online.

According to Sainsbury's third quarter trading update, sales at stores open over a year rose 0.2%, excluding fuel, in the 14 weeks to 4 January. Total third quarter sales rose 2.7%, excluding fuel.

"This quarter has been characterised by a very tough sales environment throughout October and November, with customers saving up in order to treat their families over the Christmas period," said Justin King, chief executive at J Sainsbury.

"However, we saw strong sales in the key period over Christmas, helping record numbers of customers to Live Well for Less. Like-for-like sales excluding fuel of 0.2%, coupled with a strong contribution from new space, led to our best Christmas ever."

In the seven days prior to Christmas, Sainbury's reported its busiest ever trading week, with more than 28 million transactions.

The group revealed that 23 December marked its busiest day of the year as customers spent nearly £17m (€20.5m, $28m) in one hour, at one point.

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Its premium priced branded food products, Taste the Difference, grew strongly at over 10%, performing particularly well over the Christmas period.

For example, it sold more than 100,000 Taste the Difference fresh turkeys and turkey crowns while the Christmas food ordering service saw over 100,000 orders, up 24% year-on-year.

However, as household budgets remain tight as wages stagnate in Britain, customers cashed in on £120m worth of Nectar points from the group's loyalty scheme to go towards their Christmas shop. This is a 9% increase year-on-year.

While Sainsbury beat analysts' expectations, which ranged from flat to down 1%, this marked a slowdown from second quarter growth of 2.0%.

Sainsbury remarked that during the third quarter, it was a "very tough sales environment" and only a pick-up in the key Christmas period helped offset October and November trading.