Sainsbury’s records marginal first quarter sales growth

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Sainsbury's trading update

Like-for-like sales growth has slowed for the second consecutive period at Sainsbury’s, although the grocery giant said sales by volume had improved thanks to price cuts.

In its first quarter trading statement for the 16 weeks ending June 30, Sainsbury’s like-for-like sales, excluding fuel, grew 0.2 per cent.

The marks a slowdown from the 0.9 per cent reported in the previous three months, and 1.1 per cent in the quarter before that.

On a year-on-year basis, like-for-like sales dramatically slowed from 2.3 per cent.

Meanwhile, total retail sales at Sainsbury’s 0.8 per cent in the first quarter, again a slowdown compared to 1.3 per cent recorded in the previous quarter and the 2.7 per cent recorded in last year’s first quarter.

The total retail sales figure excluded fuel and the impact of the sale of Sainsbury’s pharmacy arm.

The company, which not only operates Sainsbury’s but also Argos and Habitat, said general merchandise sales grew by 1.7 per cent and clothing sales grew by 0.8 per cent, both outperforming “a very challenging market”.

Grocery sales grew by 0.5 per cent, with groceries online and convenience up 7.3 per cent and 3.6 per cent respectively.

Sainsbury’s group chief executive Mike Coupe said “the market remains competitive”, and highlighted that the company’s merger with Asda would “create a more resilient and adaptable business for the future”.

“The headline numbers reflect the level of price reductions we have made in key areas like fresh meat, fruit and vegetables since March,” he said.

“Our price position has improved and customers have responded well, resulting in a continuation of the improved volume trend we saw in the second half of last financial year.”

He added: “The market remains competitive. However, we have the right strategy in place and our proposal to combine Sainsbury’s and Asda will create a dynamic new player in UK retail, with the scale to give customers more of what they want today and create a more resilient and adaptable business for the future.”

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