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E-commerce aids Sainsbury's sales growth

10 May 2012 - 13:20 by Sarah Collinson

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The online presence of UK retail group Sainsbury's is being highlighted as one of the main reasons that it was able to increase its market share and sales levels last year.

Sales were up by 6.8 per cent in 2011, although profits before tax were actually lower, with a 3.4 per cent dip when compared to the £827 million which was made last year.

When it comes to a share of the UK's supermarket industry, Sainsbury's stake is now 16.6 per cent, which is reported to be a decade high for the company.

It was in the arena of safe shopping online that Sainsbury's experienced its most impressive growth, with a 20 per cent rise in sales. This makes it the fastest growing online grocery retailer in the UK at the moment.

Part of the success of its e-commerce ventures is being put down to the fact that customers can now select the products they want online and then collect them from their nearest Sainsbury's store. Over 900 of the firm's shops across the UK are compatible with this service, which hybridises safe shopping online with the immediacy of the high street.

In a statement, Sainsbury's CEO, Justin King, said that the company was in the position to continue growing strongly because it appreciates the wants and needs of consumers, allowing them to save money and still enjoy an excellent shopping experience, regardless of the platform which they use to achieve it.

Sainsbury's could find that the online grocery market becomes tougher over the next year or so, as major rival, Morrison's, is set to launch its own e-commerce offering, a move which it has been planning over many months. Investment from Tesco and continued pressure from Ocado and Waitrose, will also have an impact.