UK's J Sainsbury Reports Sales Increase in Second Quarter

LONDON - UK supermarket group J Sainsbury on Tuesday reported a small rise in underlying interim profits and said that sales in the first five weeks of the second half were encouraging, the Financial Times reported.

Sir Peter Davis, chief executive, said he didn't want to discuss current trading, saying he preferred to wait until after the crucial Christmas season, which the group has been preparing for all year.

"We're ready to take trade, but what none of us know is how consumer confidence will hold up," Sir Peter said.

Sainsbury reported pre-tax profit before goodwill amortization, exceptional operating costs and non-operating items of #309 million ($438 million) compared with #300 million. However, the pre-tax line fell to #277 million including various exceptional charges related to the ongoing restructuring.

Sales in the 28 weeks to October 13 rose to #9.6 billion from #8.9 billion. Like-for-like UK sales excluding petrol rose 6 percent, the third consecutive quarter of strong sales growth.

Industry sales growth is around 5.8 percent. At 7 percent, Tesco is still beating Sainsbury but it has topped smaller rival Safeway, which is due to report first half results on Thursday.

Sainsbury completed 54 store extensions and refurbishments during the half with sales improvements of 10 percent for the 13 stores that were remodeled during the first quarter.

At Shaws, Sainsbury?' U.S. business, total sales rose 8.4 per cent to $2.3 billion, while like-for-likes were 4.5 per cent ahead. Operating profit rose 22 per cent to $101 million.
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