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Sainsbury's 7% profit rise puts Tesco in shade

Sainsbury's pwn-brand sales are growing at more than twice the rate of branded goods
Sainsbury's pwn-brand sales are growing at more than twice the rate of branded goods

British grocer J Sainsbury showed its resilience to tough market conditions with a 7% rise in first-half profit. 
              
Sainsbury trails Tesco by annual sales and is battling Wal-Mart's Asda to be the second biggest supermarket group in the UK, but it has enjoyed 35 quarters of underlying sales growth in a row. 

This has boosted its UK market share to a decade-high 16.8%.
              
The company's chief executive Justin King said today that the group was well placed for more growth, even though he cautioned that any recovery in Britain's economy may take time to take effect as consumers' budgets are being stretched by below-inflation wage rises.

The firm is outperforming rivals with a strategy focused on own-brand products and investing in fast-growing online and local convenience store channels.

Sainsbury's own-brand sales are growing at more than twice the rate of branded goods, while online and convenience stores are the two fastest-growing areas in the grocery sector, as consumers increasingly use the Internet to shop and high fuel prices deter trips to town centres and out-of-town malls.
              
Sainsbury's online grocery sales rose by 15% in the six month period, while convenience store sales increased over 20%.
              
The group has also benefited from the success of its "BrandMatch" price-comparison scheme, along with increased sales of non-food products, especially clothing, kitchen electrical and cookware.
              
In addition it avoided any involvement in a scandal over foods found to contain horsemeat when they were labelled as containing other meats.

Sainsbury's profit before tax and one-off items reached £400m sterling in the six months to September 28 - at the top end of analysts' forecasts and ahead of the £374m made last year.
              
In stark contrast, Tesco last month posted a 1.5% fall in first-half UK trading profit.
              
According to monthly data from market researcher Kantar Worldpanel, only Sainsbury and John Lewis's Waitrose among Britain's top six grocers are currently resisting pressure from discounters Aldi and Lidl to expand their market share.

Sainsbury's first-half sales rose 4.4% to £13.95 billion, while sales at stores open more than a year, excluding fuel, were up 1.4%. Cost savings of £55m were also eked out.
              
It did, however, book a £92m impairment charge following a review of its property pipeline that identified some sites where it no longer wishes to build stores.
              
Sainsbury's said it would raise its interim dividend by 4.2% to 5 pence