Sainsbury's results look weak at first glance, but are actually pretty strong

Total sales increased 3.3 per cent.

Sainsbury’s has announced that, during the 12 weeks to 08 June 2013,  total sales (inc. VAT ex fuel) increased 3.3 per cent, with LFLs up 0.8 per cent.  While representing the grocer’s weakest LFL performance in over three years, when put into context this is another strong update from Sainsbury’s. LFL growth has been delivered against tough comparatives – with the same period in 2012 coinciding with the Jubilee – and, more importantly, against wider market trends, with the grocer continuing to outperform key rivals: Morrisons and Tesco. Investment in its well balanced brand proposition continues to have strong traction among hard-pressed British consumers in a polarised market.

Sainsbury’s is getting a number of things very right. Most notable has been investment into own-label architecture, which has afforded it authority to flex its offer in accordance to broadening consumer demands and capabilities. Indeed, both its premium Taste the Difference and mid-tier by Sainsbury’s sub-brands achieved strong growth during this period. This private label investment has been complemented strongly by clever, targeted promotional activity, with its Brand Match scheme being supported by more creative campaigns such as ‘Feed Your Family’ and targeted promotions such through Nectar and via coupon-at-till.  Collectively, this well-aligned own label and promotional activity is somewhat insulating Sainsbury’s in a climate where consumer loyalty is fickle and the hard discounters are excelling.

At the same time, Sainsbury’s continues to display pro-activity in capitalising on opportunities specific to the business and wider trends in the grocery market.  A focus on convenience and online, as well boosting sales in the short term is leaving the business strongly positioned for the next decade. Elsewhere, its non-food offer is relatively immature compared to its supermarket competitors; sales here continue to grow at more than twice the rate of food, highlighting the future scope for growth here.

When viewed in context, despite more subdued LFL growth, this performance can only be seen as providing further evidence in favour of Sainsburys’ current strategic focuses. While Morrisons and Tesco are both investing heavily to turn around their fortunes, the real short-term threat to Sainsbury’s will continue to come from the discounters at one end and Waitrose at the other. In response, it is important that Sainsbury’s continues to be proactive in widening its appeal, strongly leveraging private label and investing in creative promotional investment. 

Photograph: Getty Images

 Managing Director of Conlumino

Show Hide image

Michael Gove definitely didn't betray anyone, says Michael Gove

What's a disagreement among friends?

Michael Gove is certainly not a traitor and he thinks Theresa May is absolutely the best leader of the Conservative party.

That's according to the cast out Brexiteer, who told the BBC's World At One life on the back benches has given him the opportunity to reflect on his mistakes. 

He described Boris Johnson, his one-time Leave ally before he decided to run against him for leader, as "phenomenally talented". 

Asked whether he had betrayed Johnson with his surprise leadership bid, Gove protested: "I wouldn't say I stabbed him in the back."

Instead, "while I intially thought Boris was the right person to be Prime Minister", he later came to the conclusion "he wasn't the right person to be Prime Minister at that point".

As for campaigning against the then-PM David Cameron, he declared: "I absolutely reject the idea of betrayal." Instead, it was a "disagreement" among friends: "Disagreement among friends is always painful."

Gove, who up to July had been a government minister since 2010, also found time to praise the person in charge of hiring government ministers, Theresa May. 

He said: "With the benefit of hindsight and the opportunity to spend some time on the backbenches reflecting on some of the mistakes I've made and some of the judgements I've made, I actually think that Theresa is the right leader at the right time. 

"I think that someone who took the position she did during the referendum is very well placed both to unite the party and lead these negotiations effectively."

Gove, who told The Times he was shocked when Cameron resigned after the Brexit vote, had backed Johnson for leader.

However, at the last minute he announced his candidacy, and caused an infuriated Johnson to pull his own campaign. Gove received just 14 per cent of the vote in the final contest, compared to 60.5 per cent for May. 


Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.