Sainsbury’s raises hopes of bonuses in sales leap

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The UK's third-biggest supermarket group saw sales up 4.8% in the third quarter as it defied the crisis gripping retailers. Nearly 23 million customers shopped at Sainsbury in the seven days to December 24, highlighting the revolution the company has undergone under chief executive Justin King.

By offering a three-tier range of products — basics, standard and taste the difference — King aims to appeal to shoppers on all types of budget.

The non-food arm is also growing, with clothing line Tu increasingly popular. With rivals such as Marks & Spencer slashing jobs and banning staff bonuses, Sainsbury can reasonably claim to be one of the brightest spots in the economy.

It hired 21,000 temporary staff to deal with the Christmas rush, up from 12,000 last year. It expects to keep 10% of those staff on a permanent basis and may take on another 2,000 staff this year.

King said: "No business person will ever say never on job cuts, but this is a growing business."

M&S yesterday announced that it will axe 1200 jobs.

King, paid £2 million last year of which £1 million was a bonus, can expect to cash in again this year.

Asked if he will get a bonus this year, he said: "We have a bonus scheme which is very public. My bonus targets are the same as every other person. We are three quarters into the year and if we deliver against that I and 120,000 others will get a bonus."

Like-for-like sales in the 13 weeks to January 3 rose 4.5% and would have been higher if Sainsbury had accounted for the lower VAT rates.

Sainsbury had its best ever trading days on December 23, 24 and 31. The online arm made record deliveries.

King said: "People were shopping later. They spent money as late as they could, but they spent it."

The City sees Sainsbury profits for the year at around £535 million — a number King believes it will meet.

Nick Bubb at Pali International said: "Sainsbury delivered the goods again, but the like-for-like growth is better than we dared hope." Bubb rates the shares a buy. They fell 6p to 316 3/4p .