J Sainsbury Plc reported a sixth straight drop in quarterly same-store sales as Britain’s supermarket price war continued to gnaw away at business.
Revenue at stores open at least a year fell 2.1 percent, excluding fuel, in the 12 weeks ended June 6, the London-based grocer said Wednesday, broadly meeting analysts’ estimates.
Sainsbury’s sixth consecutive quarter of declining sales provides another illustration of how the U.K.’s largest supermarkets are struggling against the popularity of discount retailers and falling food prices. Price cuts announced by Wm Morrison Supermarkets Plc this week suggest that pressure on industry profits isn’t about to recede.
“In the context of horrific market conditions, these aren’t a bad set of numbers,” Bryan Roberts, an analyst with researcher Kantar Retail, said by phone.
Competitors have reported steeper declines in their most recent quarters. Morrison’s same-store sales fell 2.9 percent, while Wal-Mart Stores Inc.’s Asda posted a drop of 3.9 percent.
Sainsbury shares rose slightly in early London trading, and were up 0.8 percent at 251 pence as of 8:08 a.m.
Following its decision to cut prices on 1,100 products last year, the retailer said transaction volumes continued to increase in the first quarter. In May, Sainsbury increased its total planned investment in price cuts by 25 percent to 200 million pounds ($308 million).
“On a volume basis, Sainsbury have been able to defend their market share,” said Bruno Monteyne, an analyst at Sanford C. Bernstein. “They’re outperforming the competition.”
Chief Executive Officer Mike Coupe said in the statement that despite “challenging market conditions, we are confident that we are building on strong foundations and making good progress with our strategy.”
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