Sainsbury's predicted no let-up in the difficulties facing the UK supermarket industry, taking the shine off a better-than-expected Christmas quarter.
Same-store sales in the next three months will be similar to the 2.1-per-cent drop in the first half of the fiscal year, the grocer said - a fifth consecutive quarterly decline.
"It would be a very brave person who would call the turn at this stage,” chief executive officer Mike Coupe said of the industry.
The group said that sales at stores open over a year fell 1.7 per cent, excluding fuel, in the 14 weeks to 3 January, its fiscal third quarter.
Sainsbury's and competitors including market-leader Tesco have seen their market shares shrink as more customers switch to German discounters Aldi and Lidl. Their response has been to cut prices while stepping up investment in online and convenience-store offerings, putting profitability at risk.
Sainsbury's shares erased early gains in London, as analysts turned their attention away from Christmas sales that topped estimates to prospects for this year. The outlook will be made all the harder should Tesco announce new price cuts when it provides a strategy update in the near future.
"We see further pressure on [Sainsbury's] sales as Tesco invests to recover some lost market share," said Mike Dennis, an analyst at Cantor Fitzgerald.
News by Bloomberg, edited by ESM
