After the announcement of a decline in last quarter sales, Sainsbury’s shares dropped 7% in value.
The retailer said like-for-like sales, with the exclusion of fuel, declined 2.8% for the quarter ended September. This is its third consecutive quarter of declining sales.
Mike Coupe, the chief executive, blamed the price wars among supermarket chains for the deflation in several sections of their business. In a bid to compete with others such as Asda, Lidl and Aldi, Sainsbury’s have already lowered their prices on essential food products. This is Mr. Coupe’s first set of figures he has had to present since taking over from Justin King during July. He said customers’ shopping habits have changed significantly over the past decade. There has been an increase in the number of available outlets, hence they are shopping more frequently and for smaller quantities.
Total sales for Sainsbury’s, including those at stores who have been operating for under a year, also declined during the quarter by 0.8%. Its like-for-like sales saw a small improvement, with analysts having given a prediction of a 3.5% to 4% decline.
Sainsbury’s believe the change in this sector and price pressures due to competition will see food prices continue a decline.
Sainsbury’s has lost market share and its position fell from 16.6% to 16.2%, with overall sector growth down to 0.3%. Asda is the only retailer in the ‘Big Four’ supermarket list to have maintained its market share during the past year. Aldi has reported a massive 36% sales surge during 2013, with a 65% increase in pre-tax profit to reach £260.9m.
Sainsbury’s dismal figures come one day after it was embarrassed by the erroneous display of a poster encouraging staff to prompt customers to spend 50p more.
3 OCTOBER 2014,