Sainsbury’s sales dive for the sixth quarter

By Nicholas Robinson contact

- Last updated on GMT

Sainsbury's online grocery sales saw record growth
Sainsbury's online grocery sales saw record growth

Related tags: Like-for-like sales, Investment

Sainsbury boss Mike Coupe has blamed food price deflation for a drop in sales for the sixth quarter in a row, he said in a trading update today (June 10).

The supermarket’s like-for-like sales, excluding fuel, fell by 2.1% for the first quarter of 2015, while total retail sales were down by 0.6% for the quarter, it said.

Despite overall sales down, the retailer revealed record-high online grocery sales of 256,000 orders for the quarter.

Coupe, who took over at the retailer last year, said: “Trading conditions are still impacted by strong levels of food deflation and a highly competitive backdrop.

‘Fall in like-for-like sales’

“These pressures, including the effect of our own targeted price investment, have led to a fall in like-for-like sales for the quarter,” ​he added.

The volume of transactions was growing as a result of price cutting and investment in quality, he claimed.

A simplified promotional offer, which reduced promotional participation, had helped reduce waste and give consumers better levels of availability, Coupe added.

“We are known for our differentiated offer and, to reinforce our quality credentials, we announced in our Strategic Review that we would invest in the quality of 3,000 own-brand products.

“During the quarter, we introduced new products in several categories, including areas such as produce and speciality bread, focusing on British sourcing wherever possible,” ​said Coupe.

First loss

Sainsbury announced a loss of £72M – its first in 10 years – after writing down £620M of its property assets in its full year results in March.

Group sales fell by 0.9% to £26.12bn​ and like-for-like sales, excluding fuel, dropped by 1.9% for the period.

At the time, chairman David Tyler said: “We are confident that we can grow shareholder value through our increasingly multi-channel offer, and, by growing businesses across financial services, convenience, online and general merchandise.”

Meanwhile, in April, the supermarket announced plans to axe 800 jobs​ and save £500M over the next three years.

Department and deputy manager positions would be reviewed and more resources would be invested in shopfloor roles.

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