Sainsbury’s has reported an acceleration in declining sales despite discounting heavily to woo more grocery customers.
The supermarket chain, which also owns Argos, said like-for-like retail sales excluding fuel were 1.6% down in the first quarter to 29 June.
That compared to a 0.9% fall in the previous quarter.
The rate of decline in its grocery offering slowed to 0.5% from 0.6%.
Sainsbury’s also reported sales slumps of 3.1% and 4.5% respectively for its general merchandise and clothing divisions.
The company blamed the “tough retail environment” but said it had made strides when it came to market share as the so-called “big four” chains continue to battle the growth engines that are discounters Aldi and Lidl.
Chief executive Mike Coupe said: “We continue to adapt our business to changing shopping habits and made good progress in a challenging market.
“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.”
Sainsbury’s shares – which had lost almost a quarter of their market value in the year to date – were almost 2% down on the FTSE 100 after the trading statement was released.
The sales performance leaves Mr Coupe under pressure after he pledged to stay on and fight after the costly collapse of the planned merger with Asda following opposition from the competition authorities.
He faced accusations in some quarters that he had taken his eye off the shop floor as he battled for the tie-up.
Investors get the chance to have their say directly when Sainsbury’s holds its AGM on Thursday.
The first quarter trading update contained a pledge to invest in 400 stores and reduce debt.
Source : Sky News : http://news.sky.com/story/sainsburys-sales-see-steeper-decline-despite-discounting-11755820