Sainsbury's chief warns outlook is challenging
Sainsbury's has reported a 1.7% fall in like-for-like sales over the key Christmas quarter and warned that its outlook remained "challenging".
Chief executive Mike Coupe said a fall in food prices was likely to continue.
But he said the performance in the third quarter, covering the 14 weeks to January 3, showed an "improving trend". Sales had dipped 2.8% in the second quarter.
Sainsbury's said it enjoyed a record-breaking week before Christmas with 29.5 million customer transactions.
Mr Coupe said: "Sainsbury's has provided a great Christmas for our customers. Food price deflation and falling fuel prices have enabled our customers to treat themselves over the festive period."
But he added: "The outlook for the remainder of the financial year is set to remain challenging, with food price deflation likely to continue."
It comes as Sainsbury's announces its latest round of reductions as part of a £150m investment in price-cutting announced last November.
Meanwhile, Asda has just announced a £300m price move, the latest part of a £1bn five-year investment.
Mr Coupe said there had been an "improving trend" in quarter-on-quarter sales but said that, given the uncertainty in the trading environment and price cuts, the group expected fourth-quarter sales to be similar to the 2.1% decline posted in the first half.
He said that Sainsbury's had sold "the same amount of stuff we sold last year, but the prices were lower".
Sainsbury's operates 13 supermarkets in Northern Ireland.