Profit surge sees Sainsbury's on brink of overtaking Asda as Britain's second biggest supermarket chain

 
Profit boost: Sainsbury's made a £433m profit in the first half of this year
13 November 2013

Sainsbury’s is on the brink of overtaking arch-rival Asda as Britain’s second biggest supermarket chain after a nine per cent profits surge to £433 million in the first half of the year.

Analysts said the solid results showed that Sainsbury’s — which is launching its Christmas advertising campaign tonight — is by far the strongest performing member of the “big four” grocers going into the key selling season.

John Ibbotoson, director of retail consultancy Retail Vision, said: “With tough competition at the premium and budget end of the market, the middle ground of the big four is shrinking.

“Yet Sainsbury’s has managed not just to grab more of it but it is finding it very fertile territory.”

The latest official figures show that Sainsbury’s share of Britain’s £130 billion-a-year grocery market is standing at 16.8 per cent, its highest for a decade and just a whisker behind Asda. Tesco is in first place, with Morrisons fourth. Sainsbury’s boss Justin King, who has been at its helm for a decade, has been hailed for turning around a demoralised retail giant that was trounced by Tesco in the Nineties.

Retail experts said investment in making supermarkets nicer places to shop, a major convenience store opening programme and innovations such as its Taste the Difference premium range and its Brand Match price pledge had helped Sainsbury’s to poach customers from its biggest competitors.

Mr King said: “Customers’ budgets remain tight and any recovery in the British economy may take time to have an effect.

“But our consistent strategy and strong values-driven culture mean that we are well placed to continue to deliver for our customers, colleagues and shareholders.”

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