The UK’s second-largest supermarket, Sainsbury’s, has reported a consecutive quarter of falling sales due to the drop in food prices.
The total retail sales for the supermarket fell 0.4% excluding fuel, whilst like-for-like sales dropped by 1.1% in the second quarter.
In May, Sainsbury’s said the underlying profits for the year to 12 March had fallen from £681 million to £587 million, making this year the second of continuous falling profits.
As price competitors Lidl and Aldi continue to grow in the UK, Sainsbury’s has removed the vast majority of multi-buy promotions and promotional activity in favour of lower, regular prices. The supermarket say they have maintained the highest customer satisfaction scores ever.
This year, the company have made further investments in the prices of every items such as broccoli, onions, frozen pizzas and own-brand nappies to draw in customers.
Mike Coupe, group chief executive, said the company would continue to make progress against their strategy.
He added: “We delivered like-for-like transaction growth across all channels and total volume growth. This shows that customers are consistently choosing Sainsbury’s for the choice, quality, value and customer service we offer.
“Our ambition is to help customers live well for less. We have made further investment in everyday low prices and continue to improve the quality of our products. Our general merchandise and clothing offer is popular with customers and the acquisition of Home Retail Group will accelerate our multi-product, multi-channel strategy.”
Despite the drop, Argos, which Sainsbury’s took over earlier this year, reported a 2.3% increase in like-for-like sales in the second quarter to 27 August.
Mr Coupe said the supermarket will increase the number of Argos digital points in store, opening 200 new collection points by the end of the year. Sainsbury’s already have 15 Argos digital points in their stores, where customers can shop from 90,000 products.
He said: “We expect the market to remain competitive and the effect of the devaluation of sterling remains unclear. However, Sainsbury’s is well positioned to navigate the changing marketplace and we are confident that our strategy will enable us to continue to outperform our major peers.”
In another bid to entice more customers and compete with Amazons popular Prime Now service, Sainsbury’s recently announced they would be expanding their home delivery service by introducing a one-hour grocery delivery service.
The retailer has developed a new app, Chop Chop, which will allow customers to order up to 20 items to be delivered within an hour. The service has been tested in South London but plans to operate with 35,699 more postcodes in the city.