Sainsburys Suffers Lowest Sales Growth In Five Years

Thu, 17 Jun 2010

 
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Sainsbury's has become the latest supermarket chain to report a slowdown in sales growth due to sliding food price inflation and soaring fuel costs .

The retailer revealed that like-for-like sales, excluding petrol, at its stores grew by 1.1 per cent in the 12 weeks to June 12 - its smallest rise in quarterly sales for five years. Total sales grew by 4.4 per cent during the quarter, excluding fuel.

However, growth was even smaller - just 0.3 per cent - when the return of VAT to 17.5 per cent was taken into account.

The trading update comes a day after rival Tesco also revealed a 1.1 per cent increase in its latest quarterly like-for-like UK sales .

Like Sainbsurys, Tesco said its sales growth was limited by a steep drop in food price inflation and the impact of high petrol and diesel prices on shoppers.

Sainsbury's chief executive Justin King said that he expects the situation to remain the same over the next six months, with the government’s planned tax rises and spending cuts expected to increase the pressure on consumers.

He added: "Low to no growth supported by low to no inflation is the outlook for the next quarter or two."