3 percent rise in the European oil and gassector

Sainsbury, which runs over 500 supermarkets and about 275convenience stores, said sales at shops open at least a year,excluding fuel, rose 4.5 percent in the 13 weeks to Jan 3. Forecasts ranged from up 2.5 to 4.5 percent, with an averageof 3.8 percent, according to a company poll of 13 analysts. Demand was led by a sales surge for its budget "basics"range, up more than 40 percent year-on-year. In contrast to the retrenchment elsewhere in the retailindustry, Sainsbury said it would create up to 4,000 new jobsthis year due to its plans to open more convenience stores. "Good results," said Bernstein analyst Chris Hogbin."Importantly, they are retaining customers as they trade down." But, Seymour Pierce analyst Freddie George was concerned thefood market is getting more competitive as grocers battle tolure cash-strapped shoppers with promotions and price cuts Sainsbury shares were unchanged at 322.75 pence by 1150 GMT. PROMOTIONS "The level of promotional activity is increasing; consumersare continuing to trade down, a trend that is likely toaccelerate in Sainsbury's southern heartlands," he said.

Sainsbury Chief Executive Justin King said promotionsaccounted for a little more than 30 percent of total sales, upslightly from the second quarter, and that he expected theproportion to be around 30-34 percent in the months ahead. Finance Director Darren Shapland said he did not expectanalysts to change full-year profit forecasts, which averageabout 525 million pounds ($791 million), despite the strongerthan expected sales figures. "The economic environment remains particularly challengingand we expect this to continue in 2009," King said. Sainsbury is associated with higher quality, and also higherprices, than its major rivals and so was widely tipped to be acasualty of the economic slowdown. But it has caught the mood of the times with campaigns suchas "Feed Your Family for a Fiver", and recent industry data fromTNS and Nielsen suggest it is holding market share. King said the firm was benefiting from its mid-marketpositioning, signalling it was gaining custom from upmarketrivals like Marks & Spencer (MKS.L), while holding on toincreasingly value-conscious shoppers with its own-brand ranges. Tesco (TSCO.L), Britain's biggest supermarket group, hastaken a different tack, launching a new range of discountbranded goods to tackle surging sales at hard-discounters likeAlid and Lidl Tesco reports Christmas sales on Tuesday.

Sainsbury also said it had sold the freehold on two storesfor 86 million pounds, with a net initial yield of 5.5 percent. Hogbin said this was a good yield, and encouraging news forinvestors given Sainsbury's extensive property holdings.(Additional reporting by Simon Falush, Editing by James Davey,John Stonestreet and Dan Lalor). Sees '08, '09 results meeting expectations Stocks Says fundamentals of oil supplier sector still attractive End-2008 order book below Nov, end-2007 Shares rise 6 pct (Adds comments from chief executive, updates share price) By Philip Waller LONDON, Jan 8 (Reuters) - British oil and gas industrysupplier Wellstream Holdings (WSML.L) said on Thursday thatbusiness remained buoyant despite falling oil prices, and thatit expected results to meet market forecasts in 2008 and 2009. The group said in a trading statement that the sector'sfundamentals continued to be attractive and it was expecting itsbusiness to grow, citing a robust balance sheet and strongcustomer base. The stock rose 6 percent and analysts said Wellstream hadcontinued to do well despite a broad slowdown in activity in theindustry, where slumping oil prices have caused concern thatenergy explorers may delay or cancel major projects. Merrill Lynch was expecting 2009 adjusted pretax earningsbefore interest, depreciation and amortisation of 104 millionpounds, against 89.8 million pounds in 2008, the broker said ina note. Wellstream said its order book had shrunk, dipping to about330 million pounds at the end of 2008 from 350 million inNovember and 336 million at the end of 2007.

The group had 8-9 months' visibility in terms of orderbacklog, but customers sometimes tended to award contracts atthe last minute, Chapman said. "Looking at the order backlog generally, it's a very lumpybusiness and at any one point in time, you can see quite bigswings in backlog numbers," he said. At 1131 GMT, the shares had recovered early losses of morethan 4 percent to stand more than 6 percent higher at 473 pence,outperforming a 0.3 percent rise in the European oil and gassector .SXEP. Analysts at Arden Partners said the fall in Wellstream'ssales backlog between last November and December reflected widermarket uncertainty. Arden said it was continuing to advise investors to buy theshares. Merrill Lynch, which also has a 'buy' recommendation on thestock, said in a note that Wellstream's upbeat comments about2009 were "a clear positive, in our view, considering theuncertainty surrounding the pace of contract awards in thesector." (Reporting by Philip Waller; editing by John Stonestreet) Stocks. IT SEEMS THAT MR.