Sainsbury's sales dip for fifth straight quarter as it warns of 'challenging' year

The grocer’s like-for-like sales excluding fuel dipped 1.9% in its fourth quarter, but bosses hailed a “positive response” to its investment in price.

The retailer’s like-for-likes excluding fuel had fallen by 2.8% in its second quarter and 1.7% during Q3.

The supermarket giant said like-for-likes including fuel were down 3.9% for the 10 weeks to March 14, in line with its performance during the third quarter.

Total retail sales for the 10-week period were down 0.3% excluding fuel and 2.7% including fuel.

Sainsbury’s bosses said the environment “remains challenging” but insisted its price investment meant its price position relative to its big-four rivals Tesco, Asda and Morrisons had “never been stronger.”

In November Sainsbury’s revealed a £150m investment in price, which has seen it cut prices of more than 1,100 products in store.  

Chief executive Mike Coupe said that there had been an average uplift in sales of 3% on the products that have benefitted from price reductions.

Coupe insisted that regular lower prices on meat, fish and poultry, which replaced multi-buy offers, had been “well received” by customers as the supermarket giant bids to win back customers from discounters Aldi and Lidl.  

He added that growth in its convenience business “remained strong” after the opening of 23 new c-stores during the period saw sales jump 14%. Sales of general merchandise and clothing were also up 6%.

Challenging environment

Coupe said: “The trading environment remains challenging and the decisions we have taken to improve our competitiveness are reflected in our quarterly performance.

“We have absorbed record levels of food deflation in categories where we trade most strongly – produce, dairy, fresh ready meals, meat, fish and poultry – allowing customers to continue to Live Well for Less at Sainsbury’s.

“As we have reduced prices and simplified our promotional offer, we have seen like-for-like transactions grow in the quarter as new customers are discovering the great value we represent.

“We expect the market to remain challenging for the foreseeable future. Food deflation is likely to persist for the rest of this calendar year, and competitive pressures on price will continue. However, we believe that the great value and quality of our products, combined with a strong focus on developing our multi-channel offer, will enable us to outperform our supermarket peers.”