Sainsbury’s sales fall but market share increases

Supermarket Sainsbury’s hailed the success of its popular Mog’s Christmas Calamity advert as it revealed a better-than-expected performance over the festive quarter. The chain said sales in established stores excluding fuel edged 0.4% lower in the 15 weeks to January 9 against a “highly competitive” market.

But it gave no further details on its takeover plans for £1 billion-rated Argos owner Home Retail Group after the firm took the market by surprise last week when it revealed it had made an approach the group in November, which was rejected.

Sainsbury’s said its advertising campaign featuring popular children’s book character Mog the Cat was a “huge success” as it cheered a “good performance” over the season.

Its trading failed to match the 0.2% increase in festive sales reported on Tuesday by smaller rival Morrisons in what marked an unexpected result from the embattled group.

But Sainsbury’s was the only one of the so-called Big Four to gain market share over Christmas, according to data from Kantar Worldpanel on Tuesday showing its share rising to 17% in the 12 weeks to January 3 from 16.9% a year earlier.

The City is eager to hear if Sainsbury’s will increase its bid for Home Retail, which also owns DIY chain Homebase.

Sainsbury’s is still “considering its position” and sets out a rationale for the combination on its website.

It said last week it believes the combination of Sainsbury’s and Home Retail Group is an “attractive proposition for the customers and shareholders of both companies, establishing a platform for long-term value creation”.

However, a number of the grocer’s largest investors are reportedly questioning whether a tie-up between the pair would generate substantial cross-selling opportunities, as Sainsbury’s claims.