Sainsbury's like-for-like sales down 2.8% in second quarter
Sainsbury’s saw its like-for-like sales drop by 2.8% excluding fuel in its second quarter as it battled against a “fiercely competitive” market.
In the 16 weeks to 27 September total sales excluding fuel edged down 0.8%.
Sainsbury’s chief executive Mike Coupe said: "The market remains dynamic and fiercely competitive. The long-running trend of more frequent, convenient shopping has accelerated, resulting in smaller basket sizes. An increase in price investment and short-term competitor promotional activity, combined with favourable commodity markets, has resulted in deflation in many areas of our food business.”
The retailer said its customers' “channel of choice” – its convenience business – reached annualised sales of £2 billion with growth of around 17%. Meanwhile, its online groceries business grew by around 7%.
During the period Sainsbury’s opened 23 new convenience stores and refurbished ten. It also opened two new supermarkets, three supermarket extensions and refurbished a further two stores. The retailer said it is on track to deliver five new Netto stores by the end of the year and will create around 750,000 square feet of new space this year, including around two new convenience stores per week.
Looking ahead the retailer said: “In the second quarter, our performance has been impacted by the accelerated pace of change in the grocery market, including significant pricing activity and food price deflation in many areas.
“These conditions are likely to persist for the foreseeable future and we now expect our like-for-like sales in the second half of the year to be similar to the first half. We will provide a detailed strategic update at our interim results on 12 November 2014."
Earlier this month Sainsbury’s unveiled plans to lower the prices on thousands of food products while simplifying its Brand Match offering to make it clear that it matches Asda's prices on brands including items on promotion.
