Sainsbury's fights on
Sainsbury's continues its climb back towards the No 2 slot in the supermarket sales stakes.
Pre-tax profits jumped to £104m in the year to March, in stark contrast to a £238m loss in 2005. Boss Justin King's policy of slashing prices is working as customer transactions rose by a respectable £1.5m to £16m. His strategy is to boost sales by £2.5bn over the three years to March 2008, and slash costs by £400m.
Sainsbury now commands a16% share of the market, measured by sales, against 15.8% in the 12 weeks to May 21. Asda still holds second spot with 16.4% but Tesco remains massively in the lead with a 31.1% market share. Meanwhile, take-over speculation is sweeping through the stockmarket with the rumoured bid target being Wm Morrison. Share dealing in Morrison soared to more than double its normal level as speculation focused on the possibility of Allan Leighton, who helped build Asda's fortunes, mounting a bid in concert with a private equity specialist. Leighton has denied any interest in such a bid.
Tesco expects to score big during 2006 World Cup
Tesco lost a little ground as it announced sales growth of only 4.5% in its first quarter to May, compared with growth of 4.9% in the final quarter of last year. This was lower than the market was expecting.
Tesco also worried the market by declaring that consumers 'are in cautious mood'. Sales growth was reduced due to price deflation of 1.4%. Following its slowest quarterly growth in two and a half years, Tesco said it expects to sell over 6m sausages along with 5m cases of beer this month, as the nation switches on to watch the World Cup.
Tesco's fastest growth is being realised overseas, with sales roaring ahead by more than 15% in the first quarter. The market reckons the current Competition Commission probe into supermarkets will cause Tesco only the mildest of concern as it continues to offer the public competitive prices.
Musgrave posts 17% advance in sales driven by 'hot food to go'
Irish grocery retailing group Musgrave, owners of Budgens and the Londis convenience store chains, pleased the market with a 5% rise in pre tax profits for 2005 to £49.5m on sales up 17% to £3 bn. The biggest growth area has proved to be 'hot food to go' including curries and samosas.
Asda scraps plans for new store at East London's Queen's Market
Asda has ditched plans to open a supermarket in an East End stallholders' market site - the Queen's Market in Upton Park.
Asda was the preferred anchor tenant for the new site but the 160 stallholders who would have seen their century-old covered market destroyed, mounted a strong campaign against the development. Asda pulled out of the scheme, orchestrated by property developer St Modwens, on the grounds that the new store would not be profitable enough.
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