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Sainsbury’s Q3 sales decline 1.1% due to ‘cautious’ customers

Sainsbury’s has reported a 1.1% decline in like-for-like sales during its third quarter which it has attributed to “cautious customer spending”.

During the 15 week period ending 5 January the ‘big four’ grocer experienced a 0.4% increase in grocery sales, however this was offset by a  by 2.3% and 0.2% decline in general merchandising and clothing sales respectively.

Group chief executive Mike Coupe said that while Christmas “came late this year” Sainsbury’s stores were “well set up to” deal with customers doing their big Christmas shops later than usual and its convenience stores “hit a new record” on Christmas Eve.

Coupe blamed the sales decline on hesitant customers and the company’s decision to “reduce promotional activity across Black Friday.”

He said: “Sainsbury’s is focused on offering distinctive food at great prices. Grocery sales were solid across the quarter and our price position versus our competitors improved, with our £9 turkey crowns and 30p vegetables proving particularly popular. Groceries online continues to perform well and, including Argos, 20% of the group’s sales started online.

“General merchandise sales grew strongly over the key Christmas weeks and outperformed the market over the quarter. Sales declined in the quarter due to cautious customer spending and our decision to reduce promotional activity across Black Friday. Clothing performed well, with strong full price sales growth in a tough market.”

He added: “Retail markets are highly competitive and very promotional and the consumer outlook continues to be uncertain. However, we are well placed to navigate the external environment and remain focused on delivering our strategy.”

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