The grocery sector has seen prices fall for more than a year.
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Upmarket rival Waitrose last week posted a 1.4pc drop in sales over its six-week festive season, although Marks & Spencer’s food halls fared better with a 0.4pc rise over the quarter to December 26.
Kantar reckons Sainsbury’s sales were 0.8% higher in the 12 weeks to 3 January, pushing up its market share by one-tenth of a percentage point. McKevitt added, however, that United Kingdom consumers are still spending most of their money in more traditional supermarkets, particularly in December, with the pair’s combined market share dipping to 9.7 percent from the 10 percent achieved just before Christmas.
The structural upheaval caused by Aldi and Lidl continued into the Christmas period.
It has shut 53 unprofitable stores since the start of its financial year and shelved plans to open a further 49 stores. The sales performance also beat City forecasts.
Global markets have tumbled over the last week after a run of poor economic data and interruptions to trading on Chinese markets.
Sainsbury’s was once again the best performer of the traditional supermarkets, with its premium Taste The Difference brand posting its biggest-ever Christmas sales, and straightforward price cuts rather than multi-buy deals helping to attract an additional 114,000 shoppers, leading to a 0.8% sales increase on a year ago.
It said this saw overall prices fall by 2.2% compared with a year earlier, not including lower fuel prices at its forecourts.
Signs of a turnaround follow chief executive David Potts’ change in strategy, selling off convenience stores and concentrating on the shopping experience at its main supermarkets. “We expect full year 2015/16 underlying profit before tax to be in the range of GBP295 million-GBP310 million before the GBP60 million restructuring and store closure costs”, it said. However, house broker Shore Capital predicted that sales over the third quarter could be down by as much as 2.6pc.
The company noted in a press release today (January 12) that sales contribution from net new space was negative as expected after the recent disposal of 140 M stores, amongst other supermarket closures.
Analysts has expected sales to be between two and three per cent lower amid sustained pressure from discounters.
Sportswear retailer Sports Direct also suffered from broker downgrades from Numis and Haitong Research, falling more than 4 percent.
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But profit for the year is set to be worse than last year, when they plummeted 52% for the supermarkets worst performance in 8 years.
