Sainsbury’s sales fall again

Sainsbury’s posted its sixth straight quarter of falling sales as the country’s supermarket price war shows little sign of easing.

Wednesday, 10th June 2015, 10:21 am

The chain reported same store sales excluding fuel down a worse-than-expected 2.1 per cent in the 12 weeks to June 6, which comes on top of a 1.9 per cent drop in the previous three months.

Sainsbury’s remains under pressure from falling UK food prices and as the big four grocers engage in fierce competition amid a scramble for market share, which is being eaten away by discounters Aldi and Lidl.

Sainsbury’s chief executive Mike Coupe, who took over from long-standing predecessor Justin King last July, unveiled a wide-ranging plan to fight back against the discounters in November which included price cuts to 1,100 items and improvements in quality to 3,000 own-brand products.

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A Sainsbury's supermarket in Herne Hill, London Photo: Anthony Devlin/PA Wire

But Mr Coupe said today: “Trading conditions are still being impacted by strong levels of food deflation and a highly competitive pricing backdrop.

“These pressures, including the effect of our own targeted price investment, have led to a fall in like-for-like sales for the quarter.”

Mr Coupe promised to “match whatever our competitors throw at us” after Bradford-based Morrisons fired the latest salvo in the price war earlier this week, with new boss David Potts announcing that prices on 200 items including milk, butter and bread would be slashed by as much as a third.

Mr Coupe said in November the business would spend £150m on cutting prices over the year.

He insisted in the latest update there were encouraging signs despite the like-for-like sales fall, with sales volumes and transactions growing over the group’s first quarter.

He added: “We are slightly ahead of where we expected to be.”

Sainsbury’s reported its first annual loss in a decade last month, falling into the red by £72m after writing down £628m on the value of its property estate.

The latest industry data from Kantar Worldpanel for the 12 weeks to May 24 found that Morrisons was the only one of the Big Four supermarkets to grow sales. Sainsbury’s saw its sales fall 0.3 per cent but held its market share at 16.5 per cent, according to the data.

During the first quarter, Sainsbury’s introduced new speciality breads and improved its own-brand seasonal offerings such as BBQ smoked chilli pulled pork and BBQ sweet chilli chicken thighs.

It opened its 300th petrol station in Livingston during the period and opened 20 grocery click and collect sites, adding it is on track to have a total of 100 sites open by the end of the year.