Sainsbury's Q2 sales impacted by deflationary environment
Mike Coupe, Chief Executive, said “The market remains dynamic and fiercely competitive. The longrunning trend of more frequent, convenient shopping has accelerated, resulting in smaller basket sizes. An increase in price investment and short-term competitor promotional activity, combined with favourable commodity markets, has resulted in deflation in many areas of our food business.
"We are focused on serving our customers in the channel of their choice. Our convenience business reached annualised sales of £2 billion and continues to grow strongly, at around 17 per cent."
Groceries online grew by around seven per cent, impacted by a high level of competitor customer acquisition activity in the quarter.
During the quarter we opened 23 new convenience stores and refurbished 10 convenience stores.
"We opened two new supermarkets, three supermarket extensions and refurbished a further two supermarkets. We are on track to deliver five new Netto stores by the end of the year following our announcement on 20 June 2014. We will deliver around 750,000 square feet of new space this year, including around two new convenience stores per week."
"In the second quarter, our performance has been impacted by the accelerated pace of change in the grocery market, including significant pricing activity and food price deflation in many areas. These conditions are likely to persist for the foreseeable future and we now expect our like-for-like sales in the second half of the year to be similar to the first half. We will provide a detailed strategic update at our Interim Results on 12 November 2014.”
For more information:
Mike Scott
Sainsbury's
Tel: +44 (0) 20 7695 0080