Sainsbury’s sales down in ‘challenging’ trading environment

"The decisions we have taken to improve our competitiveness are reflected in our quarterly performance,” says Sainsbury's CEO Mike Coupe

UK grocer expects ‘market to remain challenging for the foreseeable future’

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18 March 2015 | 0

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Total retail sales for Q4 were down 0.3% (excluding fuel), and down 2.7% (including fuel), at UK supermarket Sainsbury’s, according to its Fourth Quarter Trading Statement for the 10 weeks to 14 March 2015. Like-for-like Retail sales for Sainsbury’s fourth quarter were also down 1.9% (excluding fuel) and down 3.9% (including fuel).

Mike Coupe, chief executive, said: “The trading environment remains challenging and the decisions we have taken to improve our competitiveness are reflected in our quarterly performance.” These measures include lowering the regular prices of over 1,100 products. In addition, Sainsbury’s says it has absorbed record levels of food deflation in the categories where it trades most strongly*, namely produce, dairy, fresh ready meals, meat, fish and poultry – in keeping with its ‘Live Well for Less at Sainsbury’s’ message.

The grocer reports that during the quarter, it saw volume growth across the food business and an average uplift of over 3% on the 1,100 products where it has made price reductions.

The retailer has also implemented its Value Simplicity programme, which is designed to replace one-off promotions with every day, lower prices. For example the ‘three for £10’ offer on key meat, fish and poultry lines, has been replaced by regular lower prices on each individual product.

Sainsbury’s also claims that it consistently outperforms major peers on product quality**. To enhance these credentials further, the retailer announced in November its commitment to improve the quality of over 3,000 products. Sainsbury’s store operational standards remain high with four Grocer wins in the ten weeks and record levels of availability.

During the quarter, Sainsbury’s general merchandise and clothing businesses performed strongly, up more than 6% on last year. Growth in the convenience business remains strong at 14%, with the retailer opening 23 more convenience stores. Sainsbury’s groceries online business saw order numbers increase by 14%. By the end of 2015, the supermarket says customers will be able to Click and Collect their online grocery orders from 100 sites.

Sainsbury’s said it expects, “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 the supermarket claims its value and quality and growing multi-channel offer, “will enable [it] to outperform our supermarket peers”.

 

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