Food deflation to continue throughout 2015 says Sainsbury’s

Sainsbury’s has reported a 1.9% fall in sales for the 10 weeks to March 14, along with a warning to expect food deflation to continue for the rest of 2015.

However, while signalling that the market will “remain challenging for the foreseeable future”, the company’s chief executive, Mike Coupe, said that its price reduction strategy meant that, relative to its major competitors, its price position has never been stronger.

“Since we announced our strategic review in November 2014, we have lowered the regular prices of over 1100 products,” he said, adding that, as a result, the supermarket had “absorbed record levels of food deflation” in categories where it trades most strongly.  This includes dairy, fresh ready meals, meat, fish and poultry.

“During the quarter we have seen volume growth across the food business and an average uplift of over 3% on the 1100 products where we have made price reductions.”

Overall, however, the Sainsbury’s message remains cautious.

“We expect the market to remain challenging for the foreseeable future, with food deflation likely to persist for the rest of this calendar year,” said Mr Coupe.  “Competitive pressures on price will also continue.”

Price cut background for pigmeat

Sainsbury’s price reductions for pigmeat products, announced following last year’s strategic review, included:

  • 8 British pork sausages 454g, reduced from £1.40 to £1.10
  • 12 Smoked back bacon 2 x 225g reduced from £4.00 to £3.50
  • 12 Unsmoked bacon rashers 2 x 225g reduced from £4.00 to £3.50
  • Rind-on unsmoked gammon steaks 450g reduced from £4.50 to £3.50
  • Unsmoked gammon joint 750g reduced from £4.00 to £3.50
  • 3 British pork chops 525g reduced from £4.00 to £3.30

See full Sainsbury’s results

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