Sainsbury’s share price: Sales drop for sixth consecutive quarter
J Sainsbury (LON:SBRY), the UK’s third-largest supermarket chain, has posted a sixth straight quarter of declining underlying sales amid a “highly competitive” market.
Sainsbury’s said in a statement today that in the 12 weeks to June 6, the company’s fiscal first quarter, like-for-like retail sales had dropped 2.1 percent excluding fuel. The figure was broadly in line with market expectations, but worse than a fall of 1.9 percent in the previous quarter. Including fuel, underlying sales were 3.7 percent down, while total retail sales decreased by 0.6 percent excluding fuel and by 2.3 percent including fuel.
Britain’s ‘big four’ supermarkets – which also include Tesco (LON:TSCO), Asda and Morrisons (LON:MRW) – are engaged in a fiercely competitive battle to regain greater market share, which has recently been substantially eroded by discount rivals Aldi and Lidl. In November, Sainsbury’s chief executive Mike Coupe unveiled a wide-ranging plan to fight back against the German chains, which included price cuts to 1,100 items and improvements in quality to 3,000 own-brand products.
Coupe said in Sainsbury’s statement today: “Trading conditions are still being impacted by strong levels of food deflation and a highly competitive pricing backdrop. These pressures, including the effect of our own targeted price investment, have led to a fall in like-for-like sales for the quarter.” However, he added that he was “encouraged by some of the early trends that we are seeing in our key trading and operational metrics”, as volume and transactions continue to grow. He noted that despite the challenging market conditions Sainsbury’s was confident it was building on strong foundations and making good progress with its strategy.
Sainsbury’s Travel Money division grew strongly in the first quarter, at over 40 percent year-on-year, while clothing delivered sales growth of over five percent. Groceries online also had a record week in the quarter with 256,000 orders, while the convenience store business remains in double-digit growth.
Sainsbury’s share price rose at the opening bell this morning, as the group’s quarterly performance was in line with City forecasts.
As of 09:00 BST, Wednesday, 10 June, J Sainsbury plc share price is 254.50p.
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