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Sainsbury's reports first sales fall in nine years

Sainsbury’s has seen its nine year run of quarterly sales growth come to an end as like-for-like sales excluding fuel fell by 3.1% in the supermarket’s fourth quarter.

GENERAL MERCHANDISE

Sainsbury's reports first sales fall in nine years

In the 10 weeks to 15 March 2014, total sales excluding fuel edged down 1%.

Chief executive Justin King said the supermarket had faced tough comparatives from the same period last year when sales had benefited from the discovery of horsemeat in some branded and competitors’ products

He added that slower market growth, unseasonably wet weather, and the later timing of Easter and Mothers Day this year had also contributed to lower sales growth year-on-year.

During the quarter, Sainsbury’s continued to see growth in its own-brand ranges, which are now significantly ahead of branded products with a penetration of 51%. The supermarket’s general merchandise and clothing business also performed well, with strong growth in menswear of over 23% year-on-year.

Following successful trials, Sainsbury’s has now introduced its new general merchandise and clothing format in 53 stores, with a further 26 planned for the first quarter of the next financial year.

The supermarket's convenience business grew at over 15% during the quarter as it continued to open new stores.

Sainsbury's said it opened around one million square feet of new space over the full financial year including 22 convenience stores in the fourth quarter. This brought the total for the year to 13 new supermarkets, 91 convenience stores and six extensions. A further 54 stores have also been refurbished.

The supermarket's online grocery business increased its sales by 6% year-on-year, reflecting a reduction in marketing while a new customer website is launched. The roll-out is now 80% complete and is due to finish in April.

King added: “Although some economic indicators are showing an improvement in the health of the economy, we expect the outlook for customers to continue to be challenging for the coming year. We remain confident that our differentiated offer, supported by ‘value for values’, Nectar data and Brand Match, will allow us to outperform our peers in the year ahead.”

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