UK Keeps Shopping Amid Economic Gloom

UK food retailer Sainsbury said on Wednesday that it managed to deliver solid quarterly sales growth despite the “wider economic situation remaining uncertain.”

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The UK went into recession in the first quarter of the year amid government spending cuts and troubles in the euro zone, but Sainsbury managed to post sales growth of 2.6 percent on a like-for-like basis.

Total sales, including fuel and new stores rose a very healthy 6.8 percent, growth which pushed the company’s pre-tax profit higher by 7.1 percent to 712 million pounds ($1,149.24 million).

CFO John Rogers told CNBC that customers are looking for value but also looking to treat themselves. “A typical basket will include our basics brands but also our Taste the Difference premium brand,” he said. Having gained market share from rivals like Tesco and Wal-Mart-owned Asda , Rogers said consumers are very sensitive to price and special offers, something they have invested in in advertising to UK consumers.

With the Olympics in Londonthis summer, the Queen’s Jubilee, and European Football Championships, the battle for sales is likely to intensify over the coming months, and Rogers is confident that Sainsbury is well positioned for the battle. That’s beginning to show through in the share price, which has lost 15 percent over the last 12 months.

“We are gaining market share and have a great pipeline of new stores, and this has been reflected in the share performance over the last 3 months” said Rogers.