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| Sainsbury's targets faster growth | Sainsbury's targets faster growth |
| (about 3 hours later) | |
| High Street supermarket Sainsbury's has said it is planning to raise £445m in order to accelerate its growth plans. | High Street supermarket Sainsbury's has said it is planning to raise £445m in order to accelerate its growth plans. |
| Sainsbury's chief executive, Justin King, said the money would give the retailer the flexibility to grow "further and faster". | |
| The news came as Sainsbury's announced that its like-for-like sales - which strip out new store space - for the 12 weeks to 13 June were up 7.8%. | The news came as Sainsbury's announced that its like-for-like sales - which strip out new store space - for the 12 weeks to 13 June were up 7.8%. |
| On Tuesday, rival Tesco said its UK first-quarter sales had risen by 4.3%. | On Tuesday, rival Tesco said its UK first-quarter sales had risen by 4.3%. |
| Expansion plans | Expansion plans |
| Sainsbury's said it would raise the £445m through a combination of selling shares and bonds. | Sainsbury's said it would raise the £445m through a combination of selling shares and bonds. |
| Although the sales growth figures are in line with expectations, they nonetheless provide further evidence of the aggressive expansion which Sainsbury is pursuing Richard Hunter, Hargreaves Lansdown Stockbrokers See Sainsbury's share price | Although the sales growth figures are in line with expectations, they nonetheless provide further evidence of the aggressive expansion which Sainsbury is pursuing Richard Hunter, Hargreaves Lansdown Stockbrokers See Sainsbury's share price |
| It said it wanted to use the money to increase the amount of floor space in its stores by 15% by March 2011, against a previous target of 10%. | It said it wanted to use the money to increase the amount of floor space in its stores by 15% by March 2011, against a previous target of 10%. |
| Mr King said he was "still cautious about the economy", but he added that the planned investment would create the chain's "fastest period of growth since the early 1980s". | Mr King said he was "still cautious about the economy", but he added that the planned investment would create the chain's "fastest period of growth since the early 1980s". |
| Sainsbury's also announced it had agreed to buy nine stores from the Co-operative Group for £29m. | Sainsbury's also announced it had agreed to buy nine stores from the Co-operative Group for £29m. |
| These stores are in addition to the 24 outlets it bought from the Co-operative Group in March this year, following the Co-op's acquisition of Somerfield. | These stores are in addition to the 24 outlets it bought from the Co-operative Group in March this year, following the Co-op's acquisition of Somerfield. |
| Online growth | Online growth |
| Total sales at Sainsbury's - including new store space - were up 3.2% in the quarter. | Total sales at Sainsbury's - including new store space - were up 3.2% in the quarter. |
| The like-for-like sales growth of 7.8% - excluding fuel and VAT - was well ahead of Tesco's 4.3% increase in UK sales in the three months to 30 May, and close to Morrisons' sales growth of 8.2% recorded in the 13 weeks to 3 May. | The like-for-like sales growth of 7.8% - excluding fuel and VAT - was well ahead of Tesco's 4.3% increase in UK sales in the three months to 30 May, and close to Morrisons' sales growth of 8.2% recorded in the 13 weeks to 3 May. |
| The firm said that customers were spending more "cautiously", and said sales of its "basics" range were continuing to grow by more than 50% from a year ago. | The firm said that customers were spending more "cautiously", and said sales of its "basics" range were continuing to grow by more than 50% from a year ago. |
| Its online food home shopping service had seen sales up 20% in the quarter, and Sainsbury's said it would start selling non-food items - including kitchenware and furniture - online in the next quarter. | Its online food home shopping service had seen sales up 20% in the quarter, and Sainsbury's said it would start selling non-food items - including kitchenware and furniture - online in the next quarter. |
| Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, said: "Although the sales growth figures are in line with expectations, they nonetheless provide further evidence of the aggressive expansion which Sainsbury is pursuing." | Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, said: "Although the sales growth figures are in line with expectations, they nonetheless provide further evidence of the aggressive expansion which Sainsbury is pursuing." |
| News of Sainsbury's fund-raising plans sent shares in the retailer down 17.25p, or 5.2%, to 314.5p in morning trade. | News of Sainsbury's fund-raising plans sent shares in the retailer down 17.25p, or 5.2%, to 314.5p in morning trade. |