Sainsbury's push for growth

By Leah Vyse

- Last updated on GMT

The UK's third largest retailer has revealed ambitious plans to
double the amount of new space it opens each year, in a bid to cut
Tesco's lead in the battle of the supermarkets.

Sainsbury's chief executive, Justin King, said it will open new floor space equivalent to five per cent of the company's total floor space every year within five years - most of which will come from opening new stores.

The new targets, which if achieved will be the equivalent of opening 25 medium sized stores a year, are part of the retailers plans to increase sales by £2.5 billion (€3.5bn) by 2008.

This year new space was equivalent to two per cent of total floor space, almost a quarter of which came from store extensions.

Sainsbury's has also put months of work into planning its January sale in which it hopes to challenge its main rivals in the non-food stakes, by slashing the prices of items such as televisions and kitchenware.

The retailer's trading director, Mike Coupe, said: "We're competing with all the major rivals in this area."

"January is just another moment in the retail calendar that we can exploit. There's a natural rhythm in the way customers behave, and the more we respond to that, the better. But we can't do this sort of thing without planning."

Non-food items are certainly an area where the retailer falls behind main competitors Tesco and Asda, consequentially King has made this aspect vital to his growth plans for the chain - he hopes to gain £700 million in additional sales from this area alone over three years.

King admitted the retailer will join the price war expected early next year between Asda and Tesco. "We have made great progress in the relativity of our position. Why would we give that up? We won't.''​ he said.

But he made clear the company's plans: "Our strategy is about being price competitive, not a price leader."

Sainsbury's challenge for the top spot has been helped recently by revelations that Asda may fall from its position as Britain's second largest retailer as soon as next month because of stagnant sales over the last 12 months.

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