Sainsbury's recorded the smallest sales decline among Britain's big four grocers in the latest 12-week period, showing tentative signs of improvement after nearly two years of underperformance, according to industry data published on Tuesday.
Sainsbury's had its proposed £7.3 billion (Dh32.43bn) takeover of Walmart-owned Asda blocked by Britain's competition regulator in April.
Market researcher Kantar said Sainsbury's sales fell 0.6 per cent in the 12 weeks to August 11. That compared with falls of 1.6 per cent, 1.5 per cent and 2.7 per cent at industry leader Tesco, Asda and Morrisons, respectively.
“While each of the big four lost [market] share, Sainsbury’s will be cheered to be thhe strongest performer among this cohort for the first time since November 2017," said Fraser McKevitt, Kantar's head of retail and consumer insight.
He said that bucking the market-wide trend towards own-label products, sales of branded goods at Sainsbury’s rose by 1.5 per cent, driven by higher levels of promotion and lower prices.
Sainsbury's' boss Mike Coupe is under pressure to turn around the group's fortunes after the failure of the Asda deal and three straight quarters of declining underlying sales. On Saturday, Sainsbury's denied a newspaper report it was talking to internal candidates about succession planning for Mr Coupe.
The group is cutting prices on daily essentials while investing in stores, technology and online services to meet the challenges of a fast-changing industry, where customers are shopping more frequently, demanding more convenience, buying more online and also flocking to German-owned discounters Aldi and Lidl. Sainsbury's will update on strategy on September 25 when it hosts a capital markets day for investors. Aldi and Lidl's sales were up 6.2 per cent and 7.7 per cent, respectively in the 12-week period, taking their combined market share to 14 per cent.
Kantar said total British grocery sales were flat over the 12 weeks, reflecting tough comparisons with 2018's strong summer, which was boosted by a heatwave and the men's football World Cup.
Total sales had fallen 0.5 per cent in Kantar's July data set - the first decline since June 2016.
“The memory of last year still looms large for retailers and this summer’s comparatively poor weather, combined with low levels of like-for-like price rises, have made growth hard to find for retailers," said Mr McKevitt.
Kantar said grocery inflation over the 12 weeks was 0.9 per cent. It said prices rose fastest in markets such as crisps, canned fish and frozen fish, while falling in canned cola, instant coffee and chilled fruit juices.
