Sainsbury’s Reports Fifth Quarter of Declining Sales

17 Mar 2015 --- British supermarket retailer Sainsbury’s has posted its fifth consecutive quarter of declining underlying sales and it announced it did not see a change in this trend occurring in the near future.

The company is the third biggest in the UK in terms of sales, behind Tesco and the Wal-Mart-owned Asda. Sales at Sainsbury’s fell by 1.9% in the 10 weeks to March 14 this year. Sainsbury’s was able to boast of nine unbroken years of sales growth until the start of last year, when it posted its first drop in sales.

Sainsbury’s, along with the other major supermarket retailers, have increasingly struggled against the rising dominance of the discounter stores, Aldi and Lidl.

Meanwhile, food deflation and the rise of online food shopping has made it an increasingly competitive arena for supermarkets. Shoppers are choosing online deliveries instead of heading to out-of-town stores – they are also favouring local and more regular ‘top-up’ shopping trips. 

“We expect the market for remain challenging for the foreseeable future,” said chief executive, Mike Coupe. “Food deflation is likely to persist for the rest of this calendar year, and competitive pressures on price will continue.”

The retailer has been cutting its prices and reducing the number of new store openings it had planned, in order to fund its focus on lower prices and competitive deals. It has cut prices on 1,100 items since November 2014. 

Sales at Sainsbury’s convenience stores rose 14% over the last quarter, while its groceries online business saw a 14% increase in order numbers.