Sainsbury's sales fall for sixth consecutive quarter

Sainsbury's has seen sales drop for the sixth straight quarter in what it says is a "highly competitive" market.

The supermarket said like-for-like sales excluding fuel fell 2.1% in the 12 weeks to 6 June, slightly better than expectations.

Including fuel, sales fell 3.7%. Sainsbury's recently opened its 300th petrol station.

Chief executive Mike Coupe said trading conditions were also "being impacted by strong levels of food deflation".

The firm said volume and transactions continued to grow, while it also remained committed to delivering its cost savings programme.

In midday trade in London, Sainsbury's shares were up by 4.94%.

Low-cost rivals

Last month the grocer reported its first full-year loss for 10 years as competition within the UK grocery market continued, and warned the outlook for the rest of the financial year would "remain challenging".

Those results were hit by a number of one-off costs, including a write-down in the value of some of its stores.

In the previous quarter, sales had fallen by 1.9%, again due to price cuts and food deflation.

Sainsbury's is the UK's third largest supermarket chain by annual revenue, after Tesco and Wal-Mart-owned Asda.

Supermarkets in the UK are battling to win back market share from cheaper rivals Lidl and Aldi.

Aldi recorded a record gain of market share over the last year, while Tesco, Asda, Sainsbury's and Morrisons all experienced a decline in sales, according to Kantar Worldpanel.

'Discount menace'

Bryan Roberts, an analyst at Kantor Retail, said: "On the face of it, a sixth consecutive quarter of declining like-for-likes is an obvious disappointment, indicative of the fact that Sainsbury's immunity to the discount menace is well and truly over.

"With Morrisons back on the front foot and Tesco and Asda continuing to spar on pricing, things certainly won't be getting any easier.

"However, the retailer has made some courageous moves on range, stores and promotion and we continue to assert that the Sainsbury's cloud has more silver lining than some."