If the overall value of a supermarket’s sales were not going up at a time of rampant food inflation something would be seriously wrong, but what’s more telling in the latest update from Sainsbury’s is news of an increase in volumes.
AJ Bell’s Russ Mould said: “Under Simon Roberts, who took over the business a little more than three years ago, there has been a renewed focus on its core food retail operation and this seems to be paying off.
“The market positioning of Sainsbury’s means it could be taking some business away from the more premium-priced Waitrose and Marks & Spencer, helping to compensate for any market share lost to the German discounters Aldi and Lidl.
“The company is also benefitting from its deliberate push to use its Nectar loyalty scheme to offer keener prices to repeat customers, cribbing the idea from its main rival, Tesco.
“There will be wider relief at Roberts’ indication that food price inflation is starting to ease. The company’s general merchandise arm – in essence the Argos retail brand – is more exposed to economic uncertainty than the grocery division. After all, people need to eat, they don’t need to buy products like toys and electrical goods.
“Sainsbury’s is at least being proactive in this area, working on efficiencies in the background so it can attract customers with keener prices in the foreground.”