Sainsbury’s has reported sales figures below stock market expectations, thus becoming the second supermarket in two days to do so.
The news comes a day after Tesco, the UK’s largest supermarket chain, reported its slowest sales rise in a year, with company shares dropping by nearly five per cent to the bottom of the FTSE 100 index.
Sainsburys said like-for-like sales excluding petrol rose by 5.1 per cent in the three months to June 16 – the company has now registered continuous growth for 10 successive quarters – although analysts had expected a rise of 5.4 per cent.
Tesco said it was facing a “tougher year” because of higher interest rates, adding its UK like-for-like sales excluding petrol rose 4.7 per cent in the 13 weeks to 26 May.
Sainsbury’s also blamed the “competitive” UK trading environment, adding that prices have been cut to help boost demand.
Despite the concerns, Sainsbury’s has managed to drive sales through increases in growth of Fairtrade and organic goods, along with its efforts to improve stock levels and availability.
Chief Executive Justin King, commented: “This is particularly pleasing as the quarter included some very tough comparatives in the final few weeks driven by the football World Cup and the very warm weather last June.”
The company is in the final year of a three-year recovery plan, which began in 2004 and is being led by Mr King.
In May, Sainsbury’s reported underlying profits £380m, up 42 per cent, and set out plans to increase sales by £3.5 billion within the next three years.
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