Planet Retail sees the latest sales fall at Sainsbury’s as further evidence of the mounting challenges facing the UK grocery market in 2015. With the retailer having to compete with Tesco, which still has its so-called ‘nuclear option’ of massive price investment in reserve, this may not be the last bad news we hear from the former darling of the grocery sector.
On Sainsbury’s Q4 results, David Gray, Retail Analyst at Planet Retail, commented:
“As per expectation, Sainsbury’s like-for-like numbers are now converging with its competitors with Q4 delivering another decline. This shows that even the former golden child of UK grocery is not immune to the double whammy of industry-wide sagging food volumes and price stagnation – a potent brew which is proving deadly to mainstream operators.
“With Tesco showing tentative signs of being ready to embark on the long slog to recovery, the challenges for Sainsbury’s will grow more daunting. The threat of more Tesco price investments is lurking in the background; something that could trigger a lengthy flatlining of food prices industry-wide.
“Although these figures are disappointing at best, Sainsbury’s still possesses some strengths, most notably in convenience where it continues to add 1-2 stores per week. Like-for-like performance is considerably better in convenience than big-box, though its growth this time around was insufficient to offset declines elsewhere.
“We can only hope Mike Coupe and his team have something special up their collective sleeve to arrest the declines. Even for an accomplished retailer like Coupe, this may prove one task too far.”
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David is available for further comment and can be contacted on +44 (0)20 7715 6132 or via e-mail at David.Gray@planetretail.net
Georgia Gaydon, Editorial Assistant
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