Retail

Grocer Sainsbury’s hit by fall in sales of non-food items

 

J Sainsbury said same-store sales fell 1.6 per cent excluding fuel in the first quarter of its financial year, hurt by a decline in general merchandise and clothing, and cautioned that the market continued to be “uncertain and highly promotional”.

General merchandise sales were down 3.1 per cent and clothing down 4.5 per cent, though the UK’s second-largest supermarket said that it increased market share in clothing.

The decline in sales was within the range of outcomes forecast by analysts. They flagged the strong comparative figures in the same quarter a year ago, when warm weather and the royal wedding boosted the supermarkets and led to a 0.8 per cent rise in same-store sales.

“General merchandise and clothing market conditions remain challenging and poor weather conditions impacted demand in some seasonal categories,” Sainsbury’s said in a statement.

Sales in the core supermarkets were down 0.5 per cent.

Mike Coupe, chief executive, said that the company’s premium “Taste the Difference” ranges were increasing market share and that it continued to improve customer service and availability. “We reduced prices on over 1,000 every day food and grocery products and improved our relative performance,” he said.

The financial services business, a source of some concern given the investment it has consumed, has continued to see growth in customer numbers.

Since the Competition and Markets Authority blocked its proposed takeover of third-placed Asda, the company has focused on reducing debt, sprucing up some of its stores and improving its price competitiveness on what it calls “commodity” items.

It said 200 of the 400 supermarkets it has earmarked for a refresh will be completed by the end of its first fiscal half, with 84 done so far.