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Sainsbury’s has announced another tough quarter of trading as it revealed a 1.2% fall in total sales during Q1.
During the 16 week period ending 29 June Sainsbury’s like-for-like sales also fell by 1.6% as its attempt to reduce the prices of more than 1,000 “big selling” own-brand products did not bear fruit.
Sainsbury’s was hit by a decline in grocery sales of 0.5% while its non-food sales struggled with general merchandise sales down 3.1% and clothing sales also falling by 4.5%.
Mike Coupe, Sainsbury’s chief executive, attributed the results to a “tough trading environment” and said despite the fall in sales the grocer had actually increased its market share in the general merchandising and clothing categories.
He said: “We continue to adapt our business to changing shopping habits and made good progress in a challenging market. We reduced prices on over 1,000 every day food and grocery products and improved our relative performance.“Our premium ‘Taste the Difference’ ranges are growing market share and we continue to improve customer service and availability. In a tough trading environment, we gained market share in key general merchandise categories and in clothing, where we are now the UK’s fifth largest retailer by volume.”
He added: “We will invest in 400 supermarkets this year, including adding an enhanced beauty offer in 100 stores. We are accelerating investment in technology: 148 supermarkets now have SmartShop self-scan, 206 Argos stores offer Pay@Browse and we upgraded 29 more Argos stores to digital formats, all helping to make shopping with us quicker and easier. In May, we celebrated Sainsbury’s 150th birthday. Our focus on giving customers high quality products at good value remains as true today as it was 150 years ago.”
The drop in sales follows the company’s failed proposal to merge with rival Asda, which was blocked in April by the UK’s competition watchdog after it concluded that the deal would result in a “substantial lessening” of competition.
