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Sainsbury's delivers strong Q2 performance

Sainsbury's reported strong like-for-like growth in the second quarter and is on track to surpass its planned growth by March 2008.

Like-for-like sales excluding fuel rose 3.1% for the 16 weeks to October 6 despite the unseasonal warm weather at the start of the period. Total sales for the quarter excluding fuel grew by 4.7% which helped to push like-for-like sales ahead 4% for the first half - ahead of Tesco's 3.5% like-for-like first half growth.

Sainsbury's is also ahead of its three-year target to grow sales by £2.5bn by March 2008, having already delivered £2.3bn of additional sales.

The supermarket's new depot in Northampton will open this month. According to chief executive Justin King, the depot will be the UK's most energy efficient distribution centre and will use half the energy of similar buildings.

Sainsbury's made no comment about the proposed £10.6 bn takeover deal for the supermarket by Qatari-backed fund Delta Two.

However Delta Two's deal could be derailed by the grocer's pension trustees unless they can reach agreement on how to protect the pension fund. The trustees and Delta Two are thought to be up to £750 million apart in their calculation of the money needed to plug the deficit.

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