Freedom Food’s “best retailer” suffers 2.8% sales fall

Sainsbury’s, which currently holds the status of being Freedom Food’s “best retailer”, has reported a fall in sales for the third quarter in a row.

Like-for-like sales, excluding fuel, in the three months to the end of September fell 2.8%, sharply contrasting with a rise of 2.1% in like-for-like sales in the same quarter in 2013. Sales in cash terms will be revealed by the supermarket on November 12.

The Sainsbury’s figures also contrast sharply with this week’s declaration of a 65.2% rise in pre-tax profits for the year to December 31, 2013, by the discount supermarket chain, Aldi. The German retailer saw sales grow 35.7% to £5.27 billion, highlighting the extent to which “price wars” are changing the face of the UK supermarket sector.

Aldi grew it’s market share from 3.1% to 4.0% in 2013 according to grocery analyst Kantar Worldpanel – and the growth has continued this year with the figure now standing at 4.8%. Sainsbury’s market share is currently about 16.2% compared to 16.6% this time last year.

Although Aldi, and fellow discounter, Lidi, are obviously progressing from a relatively low market share, their growing strength is being felt by all four big UK retailers, Tesco, Wal-Mart’s Asda, Sainsbury’s and Morrisons.

“The market remains dynamic and fiercely competitive,” said Sainsbury’s chief executive, Mike Coupe. “The long-running trend of more frequent, convenient shopping has accelerated, resulting in smaller basket sizes. An increase in price investment and short-term competitor promotional activity, combined with favourable commodity markets, has resulted in deflation in many areas of our food business.”

Sainsbury’s also published their corporate responsibility update today, including a reminder of their commitment to ‘sourcing with integrity’, highlighted by their 2014 selection as “best retailer” by Freedom Food for delivering an “outstanding contribution to farm animal welfare”.

“The award recognises that we sell 60% of all Freedom Food sold and stock more Freedom Food labelled products than any other supermarket,” said Sainsbury’s.

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