Supermarket chain Sainsbury’s has seen its sales fall for the sixth time in what it calls a ‘highly competitive market.’ Sales excluding fuel have fallen by 2.1 per cent. Significant inroads into the UK food industry by low cost retailers Lidl and Aldi have hit its sales hard. In addition, price wars waged from other big supermarket retailers such as Asda and Tesco as a strategy to wrestle back market share have also contributed to its fall in sales. Change in consumers’ habits from making weekly grocery purchases to now buying only what they require and when they need it, has also reduced the relevance of big supermarkets resulting in a fall in sales and have forced Sainsbury’s to relook its long term strategy. The UK grocery has warned that a tough year lies ahead for the entire industry.
Despite the fall in sales, Sainsbury’s Chief Executive Mike Coupe insisted that not all is bleak for the company as there were encouraging signs. Online grocery shopping hit record levels during the quarter, its clothing sales have risen 5 per cent and there have been an overall increased customer flow. Market research consultancy group Kantar have said that Sainsbury’s has made ‘some courageous moves on range, stores and promotion’ and that there is reason for ‘cautious optimism’.