* H1 underlying profit 373 mln stg vs forecast 371 mln
* H1 total sales 13.4 bln stg, up 4 pct
* Says has increased market share to near 10-year high
* Shares down 2 percent
LONDON, Nov 14 (Reuters) - J Sainsbury's
highly-respected boss rejected rumours he might be about to
leave Britain's No.3 grocer, as strong growth at convenience
stores and online helped it to outshine market leader Tesco
with higher profit.
Earlier this month, the Financial Times newspaper quoted
unidentified friends of Sainsbury's long-serving chief executive
Justin King as saying his dream job would be to run Formula One
motor racing, fuelling speculation he might step down.
"I do understand why, when someone's been in a job for eight
years successfully, people think they'd have on their mind doing
something else, but I'm very happy at Sainsbury's," King told
reporters on Wednesday.
He said he regarded the firm as having by far the best
growth opportunities of Britain's major grocers in the years
ahead, adding: "I see myself playing my part in those."
King was speaking after Sainsbury's beat forecasts with a
5.4 percent increase in first-half profit, helped by 20 percent
sales increases at its online and convenience stores businesses.
Britain's retailers are mostly struggling as disposable
incomes are squeezed by rising prices, subdued wages growth and
government austerity measures.
But online retailers are bucking the trend as time-pressed
shoppers look to pick up bargains. People are also buying more
groceries locally to cut back on waste and high petrol prices.
Tesco, Britain's biggest retailer, is suffering from its
exposure to out-of-town hypermarkets and non-food goods, where
shoppers are cutting back most. Last month, it reported a 12.4
percent fall in first half UK trading profit.
Britain's No.4 grocer Morrisons last week posted a
2.1 percent fall in third-quarter underlying sales, while No.2
Asda will publish third-quarter sales on Thursday.
"Sainsbury's continues to succeed in an increasingly
competitive grocery environment that is characterised by low to
negative volume growth," said analysts at Conlumino.
Last week an industry survey said British retail sales
slowed sharply in October, while earlier this month electrical
retailer Comet collapsed into administration, threatening 6,600
King said finance minister George Osborne's Dec. 5 autumn
statement should focus on job creation and on making employment
as affordable as possible for companies. "Employment is by far
the most powerful force for good in our economy," he said.
Sainsbury's shares are up 14 percent over the last year,
partly buoyed by the return of speculation regarding a possible
renewed bid attempt from its 26-percent Qatari shareholder.
But the stock was down 2 percent at 340.3 pence by 1120 GMT,
as analysts highlighted a very promotional, and potentially
margin-hurting, market in the run-up to Christmas, noting that
Morrisons on Tuesday launched a 10 percent off discount card.
Sainsbury's made profit before tax and one-off items of 373
million pounds in the 28 weeks to Sept. 29, ahead of analysts'
average forecast of 371 million pounds in a company poll.
First-half sales rose 4 percent to 13.4 billion pounds as
Sainsbury's increased its market share to 16.7 percent, its
highest for nearly a decade. Last month the firm posted
better-than-expected second-quarter sales growth.
Industry data has shown Sainsbury's sustaining market share
gains from rivals into its second half as it also benefits from
the success of its "Brand Match" pricing initiative, its
strength in cheaper own-brand food ranges and the popularity of
some of its non-food ranges, like Tu clothing.
While the operating profit margin was unchanged, profits
were underpinned by 60 million pounds of cost savings.
Sainsbury's is paying an interim dividend of 4.8 pence a
share, up 6.7 percent.