1st Oct 2014 06:17
LONDON (Alliance News) - J Sainsbury PLC Wednesday said like-for-like sales in the second quarter were down 2.8% year-on-year excluding fuel, and down 4.1% including fuel, its third consecutive quarterly decline.
Sainsbury's, the UK's third-largest supermarket chain by market share, said total retail sales for the second quarter, the 16 weeks to September 27, declined 0.8% year-on-year excluding fuel, and were down 2.3% including fuel.
"The market remains dynamic and fiercely competitive. The long-running trend of more frequent, convenient shopping has accelerated, resulting in smaller basket sizes. An increase in price investment and short-term competitor promotional activity, combined with favourable commodity markets, has resulted in deflation in many areas of our food business," said Chief Executive Mike Coupe in a statement.
Sainsbury's said it expects "significant pricing activity and food price deflation" to persist, and said it now expects second half like-for-like sales to be similar to the first half.
The grocer said total retail sales and like-for-like sales for the first half were down 2.1% year-on-year excluding fuel. First-half total retail sales declined 1.4% including fuel, with like-for-like sales declining 3.4% including fuel.
Sainsbury's said it will provide a details strategic update at its interim results on November 12.
The supermarket chain said its general merchandise and clothing businesses continue to deliver "strong growth".
"Our convenience business reached annualised sales of GBP2 billion and continues to grow strongly, at around 17%. Groceries online grew by around 7%, impacted by a high level of competitor customer acquisition activity in the quarter," the grocer said.
Sainsbury's said it is on track to open five new Netto stores by the end of the year. In June, the grocer moved to capture a share of the growing UK discount grocery sector, and fight back against the recent success of German discounters Aldi and Lidl, by announcing its plans to create a joint venture with Danish international discount grocery retailer Netto in the UK.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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