Sainsbury hit by slower sales

Slowing sales are expected to hit Sainsbury's second-quarter sales next Wednesday.

The company's performance has been hit by lower food price inflation and disruption from restructuring.

Like-for-like second-quarter sales growth of around 4.5-5%is expected, much lower that the 5.6% recorded in the first quarter.

"The main talking point will be the extent of the downturn in like-for-like sales growth," said broker West LB Panmure.

The results are expected to show the slowest like-for-like growth of all the UK supermarkets.

West LB believes the company should at least have been able to match the industry average sales growth, currently believed to be between 5-6%.

"Last year saw 11 major revamps, 23 other extensions and the like-for-like should also benefit from a strong opening programme over the last three years, which has added 13% to sales area," the broker said.

West LB believes that a less buoyant industry will see Sainsbury fall towards its long-term average of 2% like-for-like sales growth.

Investors will hope to see evidence of the benefits derived from the company's store refurbishment programme, although some analysts are doubtful.