Sainsbury’s sees sales fall in UK

Sainsbury’s sees sales fall in UK

Sainsbury’s, reeling from last week’s decision by the UK regulator to block its takeover of rival Asda, was alone among Britain’s big four supermarket groups in seeing sales fall in the latest 12-week period, industry data has shown.

Sainsbury’s wanted to buy Walmart-owned Asda to boost its scale and buying power, as well as to compete better with market leader Tesco and fast-growing German-owned discounters Aldi and Lidl.

However, last Thursday the UK’s Competition and Markets Authority thwarted the £7.3bn (€8.5bn) deal, saying it would have seen prices rise, not fall, as Sainsbury’s and Asda had argued.

Sainsbury’s is due to publish full-year results today with chief executive Mike Coupe under pressure to reassure investors he has the plan to arrest the sales decline.

Despite the deal’s failure, Mr Coupe’s job is not under immediate threat.

“The chairman (Martin Scicluna) and the board are fully behind Mike,” said a Sainsbury’s spokeswoman.

Sainsbury’s shares were down 0.6%, extending losses over the last six months to 29%.

Market researcher Kantar said Sainsbury’s sales fell 1.2% in the 12 weeks to April 21 compared to the same period a year ago. 

In contrast, sales at Tesco, Asda, and Morrisons increased 1%, 0.3%, and 0.6%, respectively.

Kantar said all of the big four lost market share to Aldi and Lidl, whose sales rose 11.6% and 8.6%, respectively, giving them a combined share of 13.6%.

Sainsbury’s did, however, reclaim its position as Britain’s number two supermarket group by market share — a status it lost to Asda for the first time in four years in Kantar’s last data set.

Sainsbury argues that Kantar under-reads its general merchandise market share.

This is because since acquiring Argos in 2016, Sainsbury has streamlined general merchandise ranges in its stores in favour of Argos ranges. However, Argos’ sales are not captured by Kantar.

Kantar did highlight one bright spot for Sainsbury’s in the data — double-digit growth online which coincides with the launch of its first mobile-only payment store in central London this week, demonstrating its drive towards digital innovation.

The market researcher said total UK grocery sales rose 2% over the 12-week period, the fastest rate of growth the overall sector has experienced this year.

- Reuters

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