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Sainsbury's brave face as supermarket war sees sales fall once again

By Ravender Sembhy

Sainsbury's has posted a second consecutive quarterly fall in sales as it remains under pressure amid the bitter supermarket war and food price deflation.

Northern Ireland's third most popular supermarket, which recently completed a £1.4bn takeover of Argos, reported a 1.1% drop in like-for-like sales excluding fuel for the second quarter.

According to the latest supermarket spending figures on the Northern Ireland market from Kantar Worldpanel, Sainsbury's share of supermarket spending here fell by 0.5% in the year ending September 13, 2016.

That left it with a 17.4% share, eclipsed by Asda's growing share of 17.5%, up 2.1%.

Sainsbury's boss Mike Coupe said: "We continue to make progress against our strategy and, while like-for-like sales were down 1.1%, driven by food price deflation, we delivered like-for-like transaction growth across all channels and total volume growth."

Sainsbury's added that Argos notched up like-for-like sales growth of 2.3% during the period, with Mr Coupe saying the group will open 200 new digital collection points by the end of the year.

Thirty Argos digital outlets will be open in Sainsbury's stores by Christmas. The grocer is slugging it out with rivals in a brutal price war which has eroded margins at all of the so-called big four supermarkets.

Sainsbury's yesterday pledged to "remain competitive", adding that it has made further investments in the prices of everyday items such as broccoli, onions and its frozen deep pan Margherita pizza. Nappies for newborns were also down in price from £3.75 to £2.50.

Mr Coupe added: "We expect the market to remain competitive and the effect of the devaluation of sterling remains unclear.

"However, Sainsbury's is well positioned to navigate the changing marketplace and we are confident that our strategy will enable us to continue to outperform our major peers."

The company said it had removed most multi-buy promotions and was instead focusing on "lower, regular prices".

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