Britain’s third largest food retailer by market share revealed in its trading update that in the fourth quarter, like-for-like retail sales fell 1.9% (excluding fuel). When including fuel, it fell by 3.9%.
Total retail sales for fourth quarter fell by 0.3% (excluding fuel), and by 2.7% (including fuel), compared to the previous period.
“The trading environment remains challenging and the decisions we have taken to improve our competitiveness are reflected in our quarterly performance,” said Mike Coupe, CEO at Sainsbury’s. “Since we announced our Strategic Review in November we have lowered the regular prices of over 1,100 products, ensuring our price position relative to our major competitors has never been stronger. In addition, we have absorbed record levels of food deflation in categories where we trade most strongly – produce, dairy, fresh ready meals, meat, fish and poultry – allowing customers to continue to Live Well for Less at Sainsbury’s.”
Sainbury’s, alongside other major British supermarkets, has increasingly lost market share over the last few years and has slashed prices in order to remain competitive.
“We expect the market to remain challenging for the foreseeable future,” said Coupe. “Food deflation is likely to persist for the rest of this calendar year, and competitive pressures on price will continue. However, we believe that the great value and quality of our products, combined with a strong focus on developing our multi-channel offer, will enable us to outperform our supermarket peers.”
According to Kantar Worldpanel data released this month, in 2012, Sainbury’s had a 17.1% market share in the UK, only behind Asda at 17.8% and with Tesco at 30.1%. However, as of March 1, 2015, Sainsbury’s market share stood at 16.8% while Asda’s was at 17% and Tesco at 28.7%.
In tandem, Aldi and Lidl saw their market share increase from 2.6% and 2.5%, respectively in 2012, to 5% and 3.5% this year.
Food prices also fell by 1.6% over the last year.
“Among the big four supermarkets Tesco has been the standout retailer. It has posted its strongest performance in 18 months with sales up 1.1% compared with a difficult 2014. Increasing sales have helped Tesco arrest its falling market share, which is down just 0.1 percentage point compared with last year,” said said Fraser McKevitt, Head of Retail and Consumer Insight at Kantar Worldpanel in a statement at the beginning of March.
“This resurgence has impacted Asda which competes for many of the same shoppers as Tesco. Asda’s sales are down by 2.1%, taking its market share to 17.0%. Morrisons and Sainsbury’s both grew behind the market average with sales falling by 0.4% and 0.5% respectively.”
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