Sainsbury Sales Drop Continues Amid UK Supermarket Price War

By Steve Wynne-Jones
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Sainsbury Sales Drop Continues Amid UK Supermarket Price War

J Sainsbury reported a sixth straight drop in quarterly same-store sales, as Britain’s supermarket price war continued to gnaw away at business.

Sales at stores open at least a year fell 2.1 per cent, excluding fuel, in the 12 weeks ended 6 June, London-based Sainsbury said in a statement. That compared with the median estimate of 18 analysts compiled by Bloomberg for a 2.2-per-cent drop, and the fourth quarter’s 1.9-per-cent decline.

“Trading conditions are still being impacted by strong levels of food deflation and a highly competitive pricing backdrop,” chief executive officer Mike Coupe said in the statement. “Despite the challenging market conditions, we are confident that we are building on strong foundations and making good progress with our strategy.”

Sainsbury’s sales provide another illustration of how the UK’s largest supermarkets are struggling against the popularity of discount retailers and falling food prices. Recent price cuts announced by Wm Morrison Supermarkets suggest that pressure on industry profits isn’t about to recede.

Total retail sales fell 0.6 per cent, excluding fuel, Sainsbury said. That compared with the median estimate of 12 analysts for a 0.5-per-cent drop.


As a result of its decision to lower prices on 1,100 products last year, transaction volumes continued to increase in the first quarter, the retailer said. In May, Sainsbury increased its total planned investment in price cuts by 25 per cent to £200 million ($308 million).

Bloomberg News, edited by ESM


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