Sainsbury’s suffers in fourth quarter

Sainbury’s has revealed its fourth-quarter like-for-like sales (LFLs) were down 3.8% and said last year it had benefited from the horsemeat crisis during the same period.

Total sales were down by 1.5% and Justin King, outgoing chief executive, said the market was “growing at its slowest rate since 2005”. Sainsbury’s will announce its preliminary results for 2013/14 on 7 May.

The dip in Sainsbury’s sales had been anticipated by City analysts and comes after the disastrous update by Morrisons, which has prompted fears of a supermarket price war.

King said: “We have seen a decline in sales in the quarter, reflecting tough comparatives. This time last year our sales benefited significantly from the discovery of horsemeat in some branded and competitors’ products. We are pleased, however, that market data shows we have maintained market share at 17%.

Slowest rate

“The market is now growing at its slowest rate since 2005, with falling food inflation in particular benefiting customers. The later timing of Easter and Mother’s Day, which fall in quarter one of our new financial year, and unseasonable weather have also contributed to lower market growth year on year.”

The supermarket said that it had continued to see growth in its own-brand ranges, significantly ahead of branded products, with penetration now at 51%, compared with 47% in the rest of the market (Kantar Worldpanel Market Share 52 weeks ending 2 March 2014).

It said: “Our own-brand products are, on average, 20% cheaper than a branded equivalent and are also supported by the values that our customers expect of us.”

It has also seen growth in the convenience market and, during the quarter, it saw one million transactions in a day.

King is to leave the supermarket chain in July, after 10 years at the head of the company. Mike Coupe, Sainsbury's group commercial director, will succeed him as chief executive.

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