Value brands take the headlines again
The announcement of a 6.2% jump in like-for-like sales in 11 weeks to 21st of March has caught the eye of many analysts covering Sainsbury's. The leading UK supermarket has surpassed earlier forecasts of a 5.5% like-for-like rise in sales although much of this has been accredited to significant interest in value brands. The surprising figures have led to significant upgrades from stock analysts and a more upbeat feel about the sector.
Sainsbury's is not the only supermarket in the UK to benefit from a "downgrading" of consumer spending in relation to food. Value ranges are becoming more and more popular across the industry and competition from the bargain basement companies such as Aldi appears to be taking away market share from the likes of Asda, Tesco and Sainsbury. While value brand purchases looks set to grow in value in the short to medium term we will at some point see a return to premium products although this could be some way.
This is just one area of the UK economy which is experiencing a significant "tightening of belts" from UK consumers. However, the likes of Tesco and Sainsbury have managed to grab the attention of some value shoppers to make up for an expected slowdown in the sale of premium products.
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