Sainsbury’s was the only major supermarket chain to suffer a drop in sales over Easter, bucking the trend among its rivals, which reaped the benefits of the warm weather.
The grocery chain’s sales fell 1.2% in the three months to 21 April according to the latest industry data from market researcher Kantar, while the grocery sector as a whole grew 2%, its fastest rate this year. Shoppers spent a record £2.5bn at Easter as higher temperatures boosted sales of ice-cream and hay fever remedies.
In the latest run of bad news for Sainsbury’s after its planned £7bn merger with Asda was blocked last week by the competition watchdog, it was the worst performer, not only among the big four supermarkets, but also behind smaller rivals including Iceland and Co-op.
Kantar’s view of Sainsbury’s performance is partly affected by the installation of Argos outlets in its stores, so that general merchandise sales once registered by the supermarket are now clocked up at the catalogue shop.
But the fall in sales at Sainsbury’s will add to pressure on chief executive Mike Coupe, who is expected to reveal a back-to-basics strategy for the business on Wednesday after the Competition and Markets Authority crushed his merger plans.
Coupe’s job is on the line as Sainsbury’s share price has sunk to its lowest point in more than 20 years since the merger plan collapse.
The supermarket is expected to reveal a fall in annual profits and a further decline in sales at established stores as it faces increased competition from fast-growing discount chains Aldi and Lidl as well as a revived Asda and Tesco.
Fraser McKevitt, head of retail and consumer insight at Kantar, said Sainsbury’s online sales increased by more than 10% which, alongside the launch of a mobile payment store this week, demonstrated a “drive towards digital innovation”.
Asda, which owner Walmart is still rumoured to be considering offloading, was the second worst performer according to Kantar, with sales up 0.3%. All four of the major supermarkets – Sainsbury’s, Asda, Tesco and Morrisons – lost market share.
Aldi remained the UK’s fastest-growing grocer, with sales up 11.6% over the period, giving it a market share of 7.9%. Aided by its store-opening programme, Aldi attracted an additional 823,000 shoppers through its doors.
Lidl, Ocado and the Co-op also increased market share and sales.
