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Sainsbury’s expands online service after sales rise

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Sainsbury’s is expanding its online service after a year in which sales at its internet grocery service grew by almost 20% to more than £500m.

From this month it is to trial in 10 stores a new click and collect service for its non-food online business, which was launched in July 2009 and offers more than 8,000 products.

The update came in its full-year results for the 12 months to March 20 2010.

The company also said some 90% of UK households could now shop online through Sainsbury’s online grocery service, which had boasted “record service and product availability metrics” during the year.

And it promised further development of its online businesses as a key way to achieve its aim of “reaching more customers through additional channels.” The other way it plans to do this is by opening more convenience stores.

Elsewhere in its results, Sainsbury’s said non-food sales had grown three times as fast as food.

Underlying pre-tax profits rose by 17.5% to £610m, from £519m at the same time last year, while like-for-like sales, excluding fuel rose 4.3%. Total sales, including fuel, rose by 5.1% to £21.4bn from £20.4bn last year.

Justin King, chief executive, said: “Whilst we expect the environment will remain challenging and consumer spending will be under pressure, we believe our strong space growth plans, supporting our expanding food, complementary non-food and convenience store businesses, alongside our continued focus on productivity, will enable the business to make further good progress.”

Our view: Closer to home and convenient seems to be working for Sainsbury’s, both in convenience stores and online. Of course they’re also areas that are working for their rivals as well – and Sainsbury’s is to some extent still playing catch up in its online services. Tesco’s Click and Collect service is already available, for example, in more than 250 stores while ASDA already has its trial of the same service underway. How will Sainsbury’s differentiate itself as the service to choose?

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