Sainsbury’s looks forward, despite suffering sales decline

The latest interim results for supermarket chain Sainsbury’s have revealed that deflation has had a damaging impact on grocery sales. 

The supermarket announced that food sales declined by almost 1%. However, the Taste the Difference range, which includes beef mince, free-range British whole chicken, and British Wiltshire cured ham, among other products, contributed to over 2% volume growth as it gained continuous industry recognition.

The strategic report claimed that mainstream grocers continued to experience lower like-for-like sales as a result of deflation. Despite consumers finding themselves with more money in their pockets, it was highlighted that they were not yet spending this extra money on groceries.

It said: “Excellent harvests and high yields, particularly in Europe, have led to a drop in commodity prices. Fresh foods such as meat, fish, poultry and produce have seen the biggest reductions year-on-year as food retailers pass on the resulting lower prices to customers.”

In addition, the larger supermarket sales have been knocked by the discounters, which have “grown their market share to over 9%” by charging lower prices and focusing on selling their own brands.
Subsequently, the larger supermarkets have been pressurised into lowering prices in an attempt to win back customers.

Although food sales are not performing as well as they could be, Sainsbury’s chief executive Mike Coupe said that they were continuing to make good progress.

“The grocery retail marketplace remains challenging, but Sainsbury’s is a great business, run by an experienced management team, supported by talented colleagues and strong values,” he said. “I am confident we are making progress and we are looking forward to a successful Christmas, offering our customers fantastic products and great value.”

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