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| Sainsbury's reports further fall in sales | Sainsbury's reports further fall in sales |
| (about 1 hour later) | |
| Supermarket chain Sainsbury's has reported a second consecutive quarter of falling sales as it faces increasing competition from discount rivals. | Supermarket chain Sainsbury's has reported a second consecutive quarter of falling sales as it faces increasing competition from discount rivals. |
| It said like-for-like sales, which strip out trading at new stores, excluding fuel, in the 12 weeks to 7 June were 1.1% lower compared with a year earlier. | It said like-for-like sales, which strip out trading at new stores, excluding fuel, in the 12 weeks to 7 June were 1.1% lower compared with a year earlier. |
| In March, Sainsbury's reported its first fall in sales for nine years. | In March, Sainsbury's reported its first fall in sales for nine years. |
| Chief executive Justin King is stepping down in July after 10 years. | Chief executive Justin King is stepping down in July after 10 years. |
| He will be succeeded by Mike Coupe, Sainsbury's group commercial director. | He will be succeeded by Mike Coupe, Sainsbury's group commercial director. |
| Shoppers 'cautious' | Shoppers 'cautious' |
| Mr King said the supermarket had continued to invest in reducing prices and improving quality in a "challenging market". | Mr King said the supermarket had continued to invest in reducing prices and improving quality in a "challenging market". |
| He said: "Lower food price inflation and reduced fuel prices are a welcome respite to customers' finances, but they continue to spend cautiously, leading to industry growth in the quarter being the slowest in a decade." | He said: "Lower food price inflation and reduced fuel prices are a welcome respite to customers' finances, but they continue to spend cautiously, leading to industry growth in the quarter being the slowest in a decade." |
| Total sales for the quarter, excluding fuel, rose by 1%, and Sainsbury's added it was confident it would outperform its rivals this year. | Total sales for the quarter, excluding fuel, rose by 1%, and Sainsbury's added it was confident it would outperform its rivals this year. |
| The supermarket's share price rose 2% to 337p in early trade on the London Stock Exchange. | |
| Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said the fall in like-for-like sales was "largely as expected and set against sluggish industry growth". | |
| He added: "More positively, Sainsbury's online and convenience offerings are becoming an increasingly important and recognised part of the business, whilst the company continues to offer differentiation on factors other than price." | |
| In May, Sainsbury's reported a 16.3% rise in annual pre-tax profits to £898m, but also warned of "challenging" times ahead. | In May, Sainsbury's reported a 16.3% rise in annual pre-tax profits to £898m, but also warned of "challenging" times ahead. |
| The big four supermarkets - Tesco, Sainsbury's, Asda and Morrisons - are being squeezed by low-cost rivals such as Aldi and Lidl, as well as upmarket chains such as Waitrose. | The big four supermarkets - Tesco, Sainsbury's, Asda and Morrisons - are being squeezed by low-cost rivals such as Aldi and Lidl, as well as upmarket chains such as Waitrose. |
| Skirmishes | Skirmishes |
| They have responded by cutting prices on essential items including bread, milk and eggs, in an attempt to stem the loss of customers to the low-cost chains. | They have responded by cutting prices on essential items including bread, milk and eggs, in an attempt to stem the loss of customers to the low-cost chains. |
| In May, Mr King told the BBC: "There's always a price war in supermarket retailing. Occasional skirmishes break out, I guess this is one of them." | In May, Mr King told the BBC: "There's always a price war in supermarket retailing. Occasional skirmishes break out, I guess this is one of them." |
| "In the end, it isn't just about price. Quality, the provenance of sourcing is a big factor as well." | "In the end, it isn't just about price. Quality, the provenance of sourcing is a big factor as well." |
| Sainsbury's rival Tesco recently reported a third consecutive quarter of falling UK sales. | Sainsbury's rival Tesco recently reported a third consecutive quarter of falling UK sales. |
| For the three months to 24 May, the supermarket said like-for-like UK sales including VAT and excluding petrol fell by 3.7%. | For the three months to 24 May, the supermarket said like-for-like UK sales including VAT and excluding petrol fell by 3.7%. |
| Chief executive Philip Clarke said trading would remain challenging "throughout the coming quarters". | Chief executive Philip Clarke said trading would remain challenging "throughout the coming quarters". |
| On Tuesday, figures from the British Retail Consortium (BRC) found average food sales on a quarter-on-quarter basis slipped 0.2%, as the major supermarkets cut prices to hold market share and fight off competition from their discount rivals. | On Tuesday, figures from the British Retail Consortium (BRC) found average food sales on a quarter-on-quarter basis slipped 0.2%, as the major supermarkets cut prices to hold market share and fight off competition from their discount rivals. |