Sainsbury’s sales down as firm takes fifth hit

The 'big four ' supermarkets are going to continue to struggle against the double-digit growth show by budget groups Lidl and Aldi
The 'big four ' supermarkets are going to continue to struggle against the double-digit growth show by budget groups Lidl and Aldi

Sainsbury’s has reported a fifth successive quarter of falling sales and said it expects conditions to remain challenging for the “foreseeable future”.

The UK’s third biggest grocery chain, which has 597 supermarkets and 707 convenience stores, posted a 1.9 per cent decline in like-for-like sales for the 10 weeks to March 14, compared with a fall of 1.7 per cent in the previous quarter.

The company is about to report the first drop in annual profits in a decade and chief executive Mike Coupe warned today there were no immediate signs of a let-up in the price squeeze facing the sector.

He said: “Food deflation is likely to persist for the rest of this calendar year, and competitive pressures on price will continue.”

Mr Coupe pointed out that sales volumes were growing across its food business and there had been an average uplift of more than three per cent on the 1,100 products where the retailer has made price reductions.

Shares opened two per cent higher as the latest sales figures were in line with City expectations.

Britain’s big four grocers; Tesco, Morrisons and Asda are the other three - are engaged in fierce competition as they scramble for market share, which is being gnawed away by discounters Aldi and Lidl.

Sainsbury’s will report full-year profits in May for the first time since Mr Coupe succeeded Justin King, who stepped down last year following a successful decade in charge of the supermarket.

They are expected to show their first fall after nine years of growth, with City analysts expecting a 17 per cent fall to £659 million.

The retailer’s convenience store business continues to expand with sales growth of 14 per cent and the opening of 23 new sites in the quarter.

Online grocery orders increased by 14 per cent, leading to a record week of 245,000 orders. By the end of this year, Sainsbury’s said online customers will be able to click and collect from 100 sites.

The performance comes with recent industry figures pointing to signs of a resurgence at Tesco under its new chief executive Dave Lewis.