SAINSBURY’S chief executive Justin King yesterday conceded the pressure from discounters was an “all-year” rather than a Christmas effect, as the group posted a sharp slowdown in sales over the Christmas quarter.
Shares fell 2.4 per cent yesterday after the supermarket posted a 0.2 per cent rise in like-for-like sales in the 14 weeks to 4 January, down from two per cent growth in the previous quarter.
It also warned it will now miss its forecast for growing full-year underlying sales between one and 1.5 per cent.
King said it had been a “tough environment characterised by a game of two halves” as consumers tightened their belts in the autumn after “spending liberally” over the summer before splashing out again over Christmas.
He also denied that people who shopped at discounters had not traded up over Christmas to quality-focused retailers such as Sainsbury’s, pointing out that its quality own brand range Taste the Difference had enjoyed growth of 10 per cent. “Discounters are not a Christmas effect – it is a year-round effect. That consumers now have greater choices of places to shop is true year round,” he said.