The UK’s third largest grocer Sainsbury’s has reported another drop in sales for the first quarter of 2014 as pressure from discounters told.
Like-for-like retail sales fell 1.1 per cent (ex fuel) and 2.4 per cent (inc fuel) in Q1. The figures suggest that Sainsbury’s excellent run in the grocery market is coming to an end as Asda establishes itself as the strongest of the big four grocers. Sainsbury’s has posted a sales fall for the second successive quarter.
Chief executive Justin King, who will be succeeded by Mike Coupe in July, said: “Throughout the quarter we have continued to invest in reducing prices and improving quality, increasing the value of our offer. Lower food price inflation and reduced fuel prices are a welcome respite to customers’ finances but they continue to spend cautiously, leading to industry growth in the quarter being the slowest in a decade.”
Sales from convenience stores surged 18 per cent while new store sales rose 2.1 per cent. Sainsbury’s said its own-brand Taste the Difference range “performed strongly” and rose 10 per cent in Q1.
The quarter saw 27 new convenience stores opened and 12 refurbished; the firm said it was “on track” to open around two convenience stores a week and 750,000 of new space this year.
“Against a backdrop of demonstrably weak industry sales, Sainsbury talked of the weakest quarter in a decade but the outcome is relatively sound when compared to Morrison’s and Tesco,” said Darren Shirley at Shore Capital.