Shoppers redeemed £120m of Nectar points to help pay for Christmas shop, up 9% on the previous year
Sainsbury's announced flat sales over Christmas but said it had performed well in the face of stiff competition and weak consumer spending.
Revenue excluding new stores and fuel sales edged ahead 0.2% in the three months to 4 January. Sainsbury's said trading was difficult in October and November as customers saved up for Christmas but that sales increased strongly over the main festive period.
Justin King, the Sainsbury's chief executive, said the week leading up to Christmas was Sainsbury's busiest ever with more than 28 million transactions. But he was cautious about the outlook as cash-strapped customers rein in spending to put their finances in order.
King said: "As with last year, we expect customers to spend cautiously in the few months following Christmas in an attempt to rebalance the household finances. The general economic backdrop remains uncertain for many families."
Sainsbury's shoppers redeemed £120m of Nectar points to help pay for their Christmas shop, up 9% on the previous festive period.
Sainsbury's is the first of Britain's big four supermarkets to update investors on its performance over the important Christmas trading period. Analysts expect Tesco to reveal like-for-like sales down by about 2% when Britain's biggest grocer posts trading figures on Thursday.
The big four, also comprising Asda and Morrisons, have been caught between the rise of upmarket Waitrose and discounters Aldi and Lidl. The two German value chains have claimed their best ever UK Christmas trading.
Waitrose, part of the John Lewis Partnership, revealed branch sales excluding new stores up 4.1% in the 12 trading days before Christmas and up 3.1% in the five weeks before Christmas. The Co-operative also outperformed Sainsbury's with like-for-like sales up 1.0% in the 13 weeks to 4 January, it said on Wednesday.
Hopes of a bumper Christmas on the high street, fuelled by economic recovery and rising consumer confidence, have been dashed as households have suffered a continued squeeze from rising prices and stagnant wages.
Bryan Roberts, director at industry analysts Kantar Retail, said: "The fact Sainsbury's has posted an increase of only 0.2% in like-for-like sales is indicative of a slowdown by the retailer. In context of the likely performance of major competitors and against last year's decent comparatives, however, this is another respectable showing.
"Although Sainsbury's is among the better placed supermarkets to cope with whatever the market throws at it, we retain concerns that its profitability will come under mounting pressure in 2014."
Sainsbury's sales performance was at the top end of City forecasts and shares in the group rose 3% in early trading, to 380p.
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