A war of words over Christmas trading figures has broken out between two of Britain's largest supermarkets, with a Sainsbury's executive claiming Tesco's sales figures were "disingenuous".
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You can imagine how miffed Justin King feels today. A day after predicting his supermarket would be the Xmas winner, up pops Philip Clarke at Tesco with a number that blows Sainsbury's 0.9 per cent growth out of the water: Tesco was able to tell the stock market its sales had risen by 1.8 per cent over Christmas.
Imagine the scenario, especially when Mr King sees that Tesco has included sales from clubcard points in the numbers too – effectively handouts from Tesco to loyal customers as opposed to real bona fide sales.
So he marches over to his investor relations boss and tells him to get onto the analysts to make sure they're comparing apples with apples. The IR boss duly writes what many would say was a rather petty email and sends it out to the investor community who – funnily enough, it is their job - are aware of the issues anyway and are capable of subtracting the clubcard points and seeing that even without them, Tesco did better over the Xmas period than any of its "big four" peers.
The email from Sainsbury's analyst Adam Wilson Katsibas
I thought it worth pointing out that the UK LFL number of 1.8pc that Tesco are reporting this morning is non-IFRIC compliant. This is a bit disingenuous, they should be using the 1.4pc number in their headline. All of our reported numbers are IFRIC compliant, as they have to be under IAS18!
At least this is how one retail analyst in the City envisages it. Whether or not Mr King did march over to his IR boss is bye the bye, but there's no doubt he would have been miffed. Because, in truth, the analysts are not comparing like-with-like when they’re looking at today’s like-for-likes.
In the case of Sainsbury's, its results are for the 14 weeks from 30 September to 5 January – in other words a whole quarter's worth of sales. For Tesco, the results were just for the busy six week period leading up to and over Xmas.
And yes they did include Clubcard point sales too, but even without them Tesco still recorded a 1.4 per cent increase in like-for-like sales.
Not a brilliant result and overall profits are still down, but it's certainly better than the year ago comparable of minus 2.3 per cent.
So to say that Tesco is the Xmas winner and Sainsbury's a loser is disingenuous, I agree. But for Sainsbury's to rise to it as they did says more about the ego of Mr King than any serious argument about the numbers.
09 January 2013
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