Sainsbury's says it has 'right strategy' despite sales slowdown
PUBLISHED: 09:22 04 July 2018 | UPDATED: 09:22 04 July 2018
Sainsbury's has insisted it has the "right strategy in place" despite seeing a slowdown in sales.
The supermarket, which is pushing on with a £12bn tie-up with Asda, reported a 0.2% rise in like-for-like sales for its first quarter to June 30.
While down from growth of 0.9% in the previous three months, it is better than the dip in sales expected by some.
Grocery sales rose 0.5%, while general merchandise grew by 1.7% and clothing rose 0.8% in a “very challenging market”, it said.
But despite the slowdown, the Argos owner said sales by volume had increased thanks to recent price cuts.
Group chief executive Mike Coupe said: “The headline numbers reflect the level of price reductions we have made in key areas like fresh meat, fruit and vegetables since March.
“The market remains competitive; however, we have the right strategy in place, and our proposal to combine Sainsbury’s and Asda will create a dynamic new player in UK retail, with the scale to give customers more of what they want today and create a more resilient and adaptable business for the future.”
The group said it had secured a £3.5bn funding package “on attractive terms” for its mega-merger with Big Four rival Asda.
It plans to deliver £160m of savings from the deal by March 2019, if it is approved by Britain’s competition watchdog.
The Competition and Markets Authority (CMA) is currently in the “pre-notification” phase of its investigation, which entails gathering information before a formal inquiry can begin.
A merger between the duo, the UK’s number two and three supermarkets, will create a supermarket titan bigger than Tesco, with revenues of £51bn and a network of 2,800 Sainsbury’s, Asda and Argos stores.
They have pledged to cut prices on everyday products by around 10% after the deal.
But fears have been expressed that suppliers could get squeezed as a result, with the tie-up giving the merged entity increased buying power.