03 Jul 2019
Sainsbury’s hit by a fall in sales
British supermarket giant, Sainsbury’s has reported a third straight quarter of decreasing sales despite their attempts at implementing deep discounting strategies.
Since February, Sainsbury’s had cut prices of more than 1,000 grocery products and everyday food items. They stated that the hit to sales was mainly due to weak demand for their clothing and general merchandise.
In their latest quarterly trading statement, a drop of 1.2% in Sainsbury’s total sales was seen, excluding fuel.
Mike Coupe, chief executive of the supermarket, complained of a “tough trading environment”, but said Sainsbury’s was making progress. The firm remarked: “Retail markets remain highly competitive and promotional.”
Sainsbury’s is still struggling after its failed £7.3 billion bid to merge with rival Asda was blocked in April, after concerns raised by the UK’s competition watchdog that it would increase prices for consumers.
Following their reports being published, the groups’ shares too fell by more than 2% in early trading, before recovering slightly.
Despite the decline, the company said its premium ‘Taste the Difference’ own-brand food range had gained market share, as did their general merchandise categories and clothing, and they were not Britain’s fifth largest retailer by volume.
Official data and reports produced by competitors, including market leader Tesco, also had portrayed the problematic situation for retailers in the current period, reflecting the ongoing economic and political uncertainty.
Analysts were forecasting a fall in Sainsbury’s profits for the financial year 2019-20, before the release of their latest report. Their pre-tax profit has been estimated at £632 million, which is down from the £635 million they made in 2018-19.