Belfast Telegraph

Sainsbury sales fall for second quarter

By Graeme Evans

A tough spring for Britain's supermarket giants has been underlined when Sainsbury's posted lower underlying sales for a second quarter in a row.

Chief executive Justin King, who is leaving the chain next month after 10 years in charge, said consumers continued to spend cautiously, leading to the slowest industry growth in a decade.

Like-for-like sales at the UK's third biggest supermarket chainwere 1.1% lower when excluding fuel in the 12 weeks to June 7.

The total sales figure, which includes changes in store space, was 1% higher than a year earlier.

In the previous quarter Sainsbury's saw like-for-like sales drop 3.1% in its first decline in nine years, leading to growth of 0.2% across the financial year.

Sainsbury's has 13 outlets in Northern Ireland and employs nearly 3,000 people.

All four major supermarket retailers have found themselves squeezed by the rapid growth of German discount chains Aldi and Lidl, with Morrisons and Tesco particularly affected.

Mr King said Sainsbury's continued to invest in reducing prices, adding that he is confident the strategy will enable the chain to outperform its peers.

He said: "We expect customer spending to remain cautious and we will continue to invest to keep our offer competitive to help customers balance their household budget."

Sainsbury's said its clothing business achieved double-digit like-for-like sales growth in the quarter, including its best ever sales week in womenswear.

It added that lingerie sales improved 18% on a year earlier, while childrenswear was 15.8% higher.

Shares in the supermarket rose 2% yesterday amid relief that the overall decline in sales was in line with City expectations.

Mr King, who hands over to commercial director Mike Coupe at the start of July, has already warned that the current financial year's sales performance will be flat, while analysts expect a fall in profits to £762m.

George Scott, a retail consultant at Conlumino, said the supermarket's refusal to be drawn into an all-out price war with discounters was a sensible strategy.

Belfast Telegraph