Sainsbury expects retailers’ difficult year to continue

Sainsbury predicted no let-up in the difficulties facing the UK supermarket industry, taking the shine off a better-than-expected Christmas quarter.

Same-store sales in the next three months will be similar to the 2.1% drop in the first half of the fiscal year, the London-based grocer said yesterday, signaling a fifth consecutive quarterly decline.

Sainsbury and competitors, including market leader Tesco, have lost market share as more customers switch to German discounters Aldi and Lidl. Their response has been to cut prices, while stepping up investment in online and convenience-store offerings, putting profitability at risk.