UK retail market ‘remains challenging,’ warns Sainsbury’s boss

Sainsbury’s reported like-for-like sales dropped for a fifth consecutive quarter and warned that it was unlikely that there would be any sudden change in fortunes due to the ongoing price war in U.K. food retail.

The supermarket giant said sales at its stores fell 1.9 percent in the 10 weeks to 14 March and attributed the drop to its decision to reduce the price of more than 1,000 of its most popular products as part of a GBP 150 million (EUR 203.4 million; USD 221.6 million) Strategic Review program announced in November last year.

“We expect the market to remain challenging for the foreseeable future. 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,” said Mike Coupe, chief executive of Sainsbury’s.

Sainsbury’s said it had “absorbed record levels of food deflation” in categories that it trades strongly, including dairy, fresh ready meals, meat, fish and poultry.

“During the quarter we have seen volume growth across the food business and an average uplift of over 3 percent on the 1,100 products where we have made price reductions,” said Coupe.

“We have implemented our ‘Value Simplicity’ program, which is designed to replace one-off promotions with every day, lower prices. For example our ‘3 for GBP 10’ offer on key meat, fish and poultry lines has been replaced by regular lower prices on each individual product. This has been well received by our customers and allows them to budget and shop more conveniently.”

Progress has also been made in the retailer’s commitment to improve the quality of more than 3,000 products and it recently rolled out an improved fresh salmon offering, said Coupe.


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