Sainsbury’s reports fall in like-for-like sales for fifth consecutive quarter

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Sainsbury’s has reported a fall in like-for-like sales for the fifth consecutive quarter in what the supermarket termed a  “challenging trading environment”.

Same store sales were down 1.9%, excluding fuel, in the 10 weeks to 14 March 2015.

Total retail sales fell 0.3%, excluding fuel.

Mike Coupe, chief executive, said: “The trading environment remains challenging and the decisions we have taken to improve our competitiveness are reflected in our quarterly performance.

“Since we announced our Strategic Review in November we have lowered the regular prices of over 1,100 products, ensuring our price position relative to our major competitors has never been stronger. In addition, we have absorbed record levels of food deflation in categories where we trade most strongly– produce, dairy, fresh ready meals, meat, fish and poultry – allowing customers to continue to Live Well for Less at Sainsbury’s.”

Coupe said Sainsbury’s has seen volume growth across the food business and an average uplift of over 3% on the 1,100 products where it has made price reductions during the quarter..

General merchandise and clothing businesses performed strongly, up more than 6% on last year, the retailer said.

Growth in Sainsbury’s convenience business remains strong at 14% and in the quarter it opened 23 convenience stores.

Sainsbury's: growth in online orders

Sainsbury’s: growth in online orders

Online groceries also saw order numbers increase by 14%, with a record week of 245,000 orders. By the end of 2015 customers will be able to click and collect their online grocery orders from 100 sites.

Coupe said: “We expect the market to remain challenging for the foreseeable future. Food deflation is likely to persist for the rest of this calendar year, and competitive pressures on price will continue. However, we believe that the great value and quality of our products, combined with a strong focus on developing our multi-channel offer, will enable us to outperform our supermarket peers.”

Bryan Roberts, director retail insights, Kantar Retail, said: “No huge surprises here: in an increasingly difficult market, Sainsbury’s is seeing its core like-for-likes dwindle while continuing to post more robust growth from different corners of its business such as online, clothing and convenience.

“Mike Coupe’s strategy definitely holds water and we hope that the City, which increasingly resembles the Premiership in terms of short-termism and impatience, is able to take a longer-term perspective and not expect miracles in times of such turbulence.

“While more minor irritants like Aldi and Lidl continue to nibble at Sainsbury’s, the more ominous threat will be a sustained, meaningful recovery from Tesco. Recent Worldpanel data show that Tesco might be exiting hibernation, and Coupe will need to be agile to fend off the resumption of heavy bombardment from Cheshunt.”