Sainsbury's, the UK’s third-largest grocer, reported a fifth straight quarterly decline in same-store sales as the company struggles to contend with worsening deflation caused by a price war among supermarkets.
Revenue at stores open at least a year fell 1.9 per cent in the 10 weeks ended 14 March, excluding gasoline, London-based Sainsbury's said in a statement.
“The trading environment remains challenging,” Chief Executive Officer Mike Coupe said in the statement. “We have absorbed record levels of food deflation in categories where we trade most strongly.”
After nine years of unbroken growth, Sainsbury’s same-store sales have been declining for more than 12 months. To combat the increasing popularity of discounters Aldi and Lidl among UK shoppers, the grocer lowered prices on more than 700 products since January as part of a £150 million-pound annual investment.
Price cuts are driving record deflation in the grocery industry, with prices dropping 1.6 per cent in the 12 weeks through 1 March, according to researcher Kantar Worldpanel.
Bloomberg News, edited by ESM
