City Talk: At your convenience
Sainsbury's is to open double the number of convenience stores in 2010 as it did in 2009.
No less than 100 small neighbourhood stores are to be opened in the current financial year almost double the number opened last year. Sainsbury's is trying to catch up with Tesco it has only 335 convenience stores against Tesco's 1,000-plus. And Sainsbury's will also open 20 new supermarkets and increase the sizes of 20 other stores.
Over the year to 20 March 2010, underlying pre-tax profit increased by 17.5% to £610m comfortably outstripping City forecasts of £595m. Total sales, including VAT and petrol, rose 5.1% to £21.4bn. Like-for-like sales rose 4.3%.
Boss Justin King reckons "the whole market is slowing" and pointed out that like-for-like sales had grown by 1.7% in the last trading update in March. The high price of petrol is hitting the total weekly budget of the average customer although Sainsbury's served over 19 million customers each week in its latest year up one million on last year.
Greggs sees slight rise
Retail bakery giant Greggs, which has 1,400 shops, announced underlying revenues up 0.6% in the 18 weeks to 8 May in line with dealers' expectations. Introduced only last February, Greggs' early morning breakfast offer was scooped up by two million customers. The company is on target to open a net 50 to 60 new shops and complete 120 refurbishments this year. Chairman Derek Netherton said: "Greggs is well-placed to deliver further growth in 2010."
City forecasts profits for the current year of £51m for 2010, up from £48.8m a year earlier.
Compass points north
Compass, the world's biggest caterer, said it expects sales growth to pick up for the remaining months of 2010, on the back of a healthier corporate hospitality market. Compass has catering contracts with the likes of Chelsea Football Club, King's College Hospital and Aviva. It announced a return to sales growth in the second quarter and declared it anticipates "a modest acceleration" for the rest of the year. The first-half report shows revenues up 3% to £7.1bn. And pre-tax profit is up 19% to £459m.
Boss Richard Cousins reckons it will be another 18 months before Compass returns to its average level of 5-6% sales growth excluding acquisitions. He is looking to a healthy additional bonus from the public sector cutbacks in hospitals, schools and service businesses. He hopes that once the Tory-Lib Dem coalition government obtains major budget cuts in public sector spending, this will lead to more outsourcing to companies like Compass over the next three years.
Over the past five years, Compass has halved the number of countries in which it trades and said this streamlining was now paying off.
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