Sainsbury’s races ahead of Tesco as consumers go wild for its own-label brands

Sainsbury’s today put clear daylight between itself and the grocery market leader Tesco by posting its 34th consecutive quarter of sales growth.

This was largely driven by a strong performance from its smaller stores, online grocery business and consumers putting record numbers of its own-label products in their baskets. The country’s third-biggest supermarket chain grew its underlying sales, excluding fuel, by 0.8 per cent over the 12 weeks to June 8, much better than the falls of 1 per cent and 1.8 per cent at Tesco and Morrisons respectively. Under its long-serving chief executive Justin King, pictured, Sainsbury’s has been one of the grocery industry’s most consistent performers, although Tesco and Morrisons remain more profitable.

King described the numbers as “solid” in a “tough consumer environment” but its trading was behind Asda’s 1.3 per cent growth in its first quarter. However, Sainsbury’s big three rivals have not yet posted figures that overlapped the Queen’s Diamond Jubilee last year, which boosted food and drink sales for all.

Sainsbury’s was lifted by the recent relaunch of its core By Sainsbury’s own-label range, which delivered sales up by nearly 7 per cent in its latest quarter. Its premium Taste the Difference range also shone with growth of more than 10 per cent to make it a £1 billion brand.

Online grocery sales rose by 16 per cent in Sainsbury’s over the 12 weeks and are likely to smash through the £1 billion barrier in the current quarter.

Unlike Tesco, Sainsbury’s is benefiting from not having a big estate of hypermarkets rammed with non-food, such as TVs and stereos, demand for which is tanking during the consumer downturn. “We never believed” in having lots of these hypermarkets, said King.