Confirmation that supermarket chain Sainsbury has regained its mojo came in the form of the group's best ever Christmas sales performance, which topped the market's expectations.
The group was widely expected to have had the best Christmas of the major UK players, and it appears to have set a high benchmark with a record-breaking festive performance.
Total sales for the 14 weeks to January 7th were up 7.0% from a year earlier, or up 4.5% with fuel sales excluded. Like-for-like (LFL) sales were up 4.8%, or up 2.1% excluding fuel. Broker Nomura Securities had predicted LFL sales (excluding fuel) growth of 2.0%.
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The group said that customer transactions in the Christmas week were up 1.5m from the previous year to 26m.
The group said that sales of general merchandise and clothing continued to grow faster than food sales, with customers hitting the group's larger stores hard over Christmas, with Sainsbury suggesting that this was because customers sought out a one-stop shop to buy everything they needed for the festive period.
The group's convenience stores also chipped in, growing sales by almost 25%, "driven by new space and strong LFL sales growth.
Online grocery sales were up by almost 20% from a year earlier, with the group delivering a record 160,000 orders per week over the Christmas period.
"This was a strong quarter, rounded off by our best Christmas ever, despite the economic backdrop," said Sainsbury Chief Executive Justin King.
On the subject of the economy, the group is expecting customers to tighten their belts after splurging over Christmas. Nevertheless, the company is looking forward to the boost to demand that might come from this year's show-piece events in the UK, namely the Queen's Diamond Jubilee, the Olympic Games and the Paralympic Games.
Sainsbury's performance has thrown down a marker to sector leader Tesco, which some pundits feel will not show any LFL sales growth in the UK once fuel sales and value added tax is stripped out.
On Monday, the number four player in the UK supermarket sector, Morrisons, said LFL sales excluding fuel over the final six weeks of 2011 were up 0.7% on the corresponding period of 2010; including fuel, LFL sales growth was 3.7%.
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