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London - Sainsbury reported first-quarter sales growth that beat estimates as Brexit-fuelled food-price inflation boosted revenues in its core grocery business.
Excluding fuel, like-for-like retail sales rose 2.3% in the 16 weeks ended July 1, the London-based company said in a statement on Tuesday. That compared with the average estimate of nine analysts for a 1.9% increase. Total grocery sales grew 3% after two quarters of stagnant growth.
The figures are the first since the retailer moved to a new reporting structure in which it no longer splits out individual sales performances at the Sainsbury and Argos chains. Argos, a general merchandise retailer, was acquired last year for £1.4bn.
“We have delivered a strong performance, driven by our differentiated strategy, offering customers quality, value and choice,” CEO Mike Coupe said in the statement. “The market is competitive and we continue to manage cost price pressures closely.”
Sales growth at grocers has been a relative bright spot in the UK retail industry as Sainsbury and others increase prices to help mitigate the effects of higher sourcing costs after the decline in sterling.
This, combined with a June heat wave that pushed up demand for ice cream and barbecue food, is boosting sales. Resurgent growth at discounters like Aldi and Lidl suggests there will be limits to supermarkets’ ability to raise prices, keeping profits under pressure.
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