Sainsbury’s quarterly sales drop further as CEO faces growing pressure

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Sainsbury's sales
// Total retail sales down 1.2 per cent for Sainsbury’s first quarter ending June 29
// Like-for-like sales down 1.6 per cent for the same 16-week period
// CEO Mike Coupe expected to face criticism at Sainsbury’s AGM tomorrow in light of failed Asda merger

Sainsbury’s has reported another drop in quarterly like-for-like sales, as the Big 4 grocer braces for shareholder anger directed at boss Mike Coupe ahead of its AGM.

For its first quarter period ending June 29, the grocery giant saw like-for-like sales decline by 1.6 per cent – an acceleration of the 0.9 per cent decline recorded the previous quarter.

Meanwhile, total retail sales fell by 1.2 per cent during the 16-week period, which Sainsbury’s attributed to a “tough retail environment”.

Grocery sales declined by 0.5 per cent over the period, as the decline in sales slowed down from 0.6 per cent in the previous quarter.

Sainsbury’s also saw sales slump by 3.1 per cent and 4.5 per cent respectively for its general merchandise and clothing divisions.

The trading update come just months after the CMA blocked the £12 billion proposed merger of Sainsbury’s and Asda.

The failed merger saw Sainsbury’s shares fall to to a 30-year low in May.

Despite this, Sainsbury’s annual report last month indicated that Coupe would be awarded a £3.9 million pay packet this year, including a bonus, which represents an increase of seven per cent from the previous year.

Coupe is now expected to face criticism from some shareholders at Sainsbury’s AGM tomorrow, during which his pay packet will need to be approved through a vote.

Meanwhile, Sainsbury’s has tried to win over shoppers in recent months by lowering prices, with reductions on more than 1000 food and grocery items.

The supermarket said it has also committed to reduce its net debt by at least £600 million over the next three years.

It has also outlined significant store investment which will make improvements in 400 stores nationwide.

“We continue to adapt our business to changing shopping habits and made good progress in a challenging market,” Coupe said.

“We reduced prices on over 1000 everyday food and grocery products and improved our relative performance.

“In a tough trading environment, we gained market share in key general merchandise categories and in clothing, where we are now the UK’s fifth largest retailer by volume.”

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