Sainsbury’s: sales fall in face of tough competition

London / UK. (js) J. Sainsbury PLC announced its fourth quarter trading statement for the ten weeks to 15 march 2014. Total sales for the quarter went down 1,5 percent (down 1,0 percent ex fuel). Like-for-like sales for Q4/2013 fell 3,8 percent (3,1 percent ex fuel). Chief Executive Justin King: «We have seen a decline in sales in the quarter reflecting tough comparatives. This time last year our sales benefited significantly from the discovery of horsemeat in some branded and competitors´ products. We are pleased, however, that market data shows we have maintained market share at 17 percent».

«The market is now growing at its slowest rate since 2005, with falling food inflation in particular benefiting customers. The later timing of Easter and Mother´s Day, which fall in quarter one of our new financial year, and unseasonable weather have also contributed to lower market growth year-on-year».

«We continue to see growth in our own-brand ranges, significantly ahead of branded products, with penetration now at 51 percent, versus 47 percent for the market. Our own-brand products are, on average, 20 percent cheaper than a branded equivalent and are also supported by the values that our customers expect of us. We recently lowered the price of our milk, bread and eggs, but continue to pay a fair price to farmers through our Dairy Development Group, and only use British flour in our in-store bakeries and eggs from hens that are free to roam. Customers continue to tell us they recognise the uniqueness and value for money of our own-brand ranges».

«Our general merchandise and clothing business continues to perform well, with particularly strong growth in menswear of over 23 percent year-on-year. During the quarter we announced the renewal of our collaboration with the designer Gok Wan for a further twelve collections, and also released our eleventh collection of his ladieswear. Following successful trials, we have introduced our new general merchandise and clothing format into 53 stores, with a further 26 planned for the first quarter of the next financial year».

«During the quarter we announced the completion of the acquisition of Lloyds Banking Group´s share of Sainsbury´s Bank, and are on track to complete the transition process as planned. We expect the Bank to become an increasingly important part of the value that customers receive from Sainsbury´s, and another driver of customer loyalty».

«Growth in our convenience business remains strong at over 15 percent, and for the first time, during the quarter we saw one million transactions in a day. As well as opening around two new stores per week, we are part way through a programme to refit produce equipment in existing stores, responding to customer demand for more fresh food. Our groceries online business is growing at six percent year-on-year, reflecting a reduction in marketing while the new customer website is launched. This roll-out is now 80 percent complete and is due to finish in April».

«Store operational standards and in-store execution remain high, as demonstrated by 21 wins over the financial year in the Grocer 33 award, with record high levels of availability».

«We have opened approximately one million square feet of new space over the year, in line with our plans, including 22 convenience stores during the quarter. This brings a total for the year of 13 new supermarkets, 91 convenience stores and six extensions. We have also refurbished a further 54 stores».

«Although some economic indicators are showing an improvement in the health of the economy, we expect the outlook for customers to continue to be challenging for the coming year. We remain confident that our differentiated offer, supported by ‘value for values’, Nectar data and Brand Match, will allow us to outperform our peers in the year ahead».

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