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Sainsbury's sales dip further as it battles it out with discounters

Published:  29 September, 2016

Sainsbury's second quarter results show that the ongoing price wars are taking a toll on the retailer as like - for - like sales dipped a further 1.1%.

"We continue to make progress against our strategy and, while like - for - like sales were down 1.1 per cent (excl. fuel), driven by food price deflation, we delivered like - for - like transaction growth across all channels and total volume growth. This shows that customers are consistently choosing Sainsbury's for the choice, quality, value and customer service we offer," said Mike Coupe, the group chief executive.

The grocery side of the business has been strategically removing many of the promotions and multi-buy deals and instead offers everyday low prices one regular household items. 

Additionally it looks like the company is further expanding the number of convenient stores it has in its portfolio.  For the first half the year the grocer opened 16 new Sainsbury's convenient stores bring the total number of smaller shops to 783 and 602 supermarkets.

"Our convenience business grew by nearly seven per cent and achieved its best ever week during the quarter, in both the number of customers served and sales in a week. We opened nine new convenience stores."

Online is also providing growth opportunities for the retailer, with the report outlining "groceries online delivered eight per cent sales growth and nearly 12 per cent growth in customer orders . Our online fulfilment centre in East London is now open and caters for the growing demand for our online delivery service in the capital . We also began trialling same day online grocery deliveries , now available from eight stores."

According to Connor Campbell, a senior market analyst at the downturn in  sales is not great for the retailer.  He said: "It looks like Sainsbury's might be starting to lag behind in the supermarket price war. While Morrisons, traditionally the weakest of the Big Four, managed a third consecutive quarter of like-for-like sales earlier in the month and, according to Kanter Worldpanel, Tesco is at a 2 year sales high, Sainsbury's revealed yet another disappointing update this Wednesday, with a 1.1% drop in comparable sales joined by a 0.4% decline in total growth."