Sainsbury’s just revealed that it made a full year loss of £72 million for the 52 weeks to March 14, this year as like-for-like sales (including VAT, excluding fuel) fell 1.9%.
The British supermarket said that in its results statement today that underlying profit before tax also tumbled by 14.7% to £681 million ($US1 billion).
“The UK marketplace is changing faster than at any time in the past 30 years which has impacted our profits, like-for-like sales and market share,” said Mike Coupe, CEO of Sainsbury’s in a statement. “However, we are making good progress with our strategy, and our investment in price and quality is showing encouraging early signs of volume and transaction growth.”
Sainsbury’s not only blamed the bitter price war between other supermarkets for its lack lustre results but, interestingly, it specifically cited the impatience of shoppers to grab food on the go for dwindling sales (emphasis ours):
As customers have started to shop more frequently and across an increasing range of shopping channels, they now enjoy an unprecedented level of flexibility and convenience in the way that they buy their groceries. This has allowed customers to tailor their expectations for each shopping trip and potentially have a very specific shopping mission in mind.
For example a customer buying a product such as a sandwich is looking to consume that product either immediately or very shortly after purchase. The speed and ease of shop offered by a convenience store is likely to be more attractive to a customer with limited time. Price is important as this is an everyday purchase, but not necessarily the key consideration. A customer can still buy a sandwich in a supermarket but is doing so increasingly less. This migration of everyday purchases to a convenience store is a major reason behind the falling volumes in supermarkets. It is not only everyday purchases that are subject to changing shopping missions. Products which are designated for special events, for example Valentine’s Day flowers, are also bought for immediate or short-term use, but here the customer is likely to be even less price sensitive as the purchase is a highly considered one, where quality and freshness really matter.
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