Sainsbury expects "squeezed" Christmas trading

EPSOM Thu Dec 13, 2012 3:47pm GMT

Shopping trolleys are lined up in front of a Sainsury's supermarket in London October 5, 2011. REUTERS/Luke MacGregor

Shopping trolleys are lined up in front of a Sainsury's supermarket in London October 5, 2011.

Credit: Reuters/Luke MacGregor

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EPSOM (Reuters) - J Sainsbury (SBRY.L), Britain's No. 3 supermarket group, said the fall of Christmas Day on a Tuesday this year along with strict laws on Sunday opening meant trading activity would be "very squeezed".

December 23 is traditionally the busiest day of the year for Britain's grocers. However, because that day falls on a Sunday trading is restricted to just six hours.

"Sunday (December 23) will be the busiest time ever in grocery retailing. That's not just something for us, I think that's something for the industry in general," Commercial Director Mike Coupe told reporters on Thursday during a media visit to a store in Epsom, south west of London.

The government's refusal to allow extended trading hours on December 23 meant "a massive logistical challenge" for the retailer in terms of marshalling car parks, moving shoppers through stores and packing bags.

The firm will have 20,000 store staff over the key Christmas trading period, up from 15,000 last year.

With Britain facing the prospect of a triple dip recession many retailers have been finding the going tough as consumers fret over job security and a squeeze on incomes.

Sainsbury's has performed better than most in the economic downturn, helped by the development of its online and convenience stores business, the two fastest-growing grocery channels in the UK.

It has also benefited from the success of its "Brand Match" pricing initiative, higher penetration of own-label food ranges and increased sales of non-food products.

Last month the firm posted a 5.4 percent rise in first-half profit as it continued to outshine market leader Tesco (TSCO.L), which last week posted a return to falling quarterly underlying sales in its home market.

Tesco is spending 1 billion pounds on a recovery plan for the UK and some analysts argue that if this is a success Sainsbury's has the most to lose amongst Britain's big four grocers, which include No. 2 Asda, owned by Wal-Mart (WMT.N), and No. 4 Wm Morrison (MRW.L).

Coupe was, however, relaxed about Tesco's fightback.

"I think it's about eight years I've been reading that we will end up being damaged by Tesco or indeed a number of other competitors," he said.

"All I can do is stand by the track record and focus on what we're doing," he said.

Shares in Sainsbury's, up 19 percent over the last year, were down 0.3 percent at 347 pence at 1517 GMT, valuing the business at about 6.57 billion pounds.

(Reporting by James Davey; Editing by Helen Massy-Beresford)

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