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Sainsbury's warns market 'remains challenging' Sainsbury's warns market 'remains challenging'
(35 minutes later)
Sainsbury's has warned it expects the market to "remain challenging for the foreseeable future" after reporting a drop in like-for-like sales in the fourth quarter. Sainsbury's has warned it expects the market to "remain challenging for the foreseeable future" after reporting a drop in like-for-like sales for a fifth consecutive quarter.
The supermarket chain said sales at stores open at least a year fell 1.9% excluding fuel in the 10 weeks to 14 March. It said sales at stores open at least a year fell 1.9% excluding fuel in the 10 weeks to 14 March.
Total sales fell 0.3%. Total sales fell 0.3% as price cuts and food deflation both affected trading.
"The trading environment remains challenging," said Sainsbury's chief executive Mike Coupe. Sainsbury's said the drop in sales reflected decisions the group had taken to "improve our competitiveness".
At the start of the year, Sainsbury's said it would cut the prices of 1,000 of its most popular products as part of a £150m programme announced in November.
It said it had now reduced prices on more than 1,100 items, resulting in an average sales increase of 3% on these products.
But it said a combination of food deflation, which it expected to continue for the rest of the year, and competitive pressures on price meant the outlook remained challenging.
The "big four" supermarkets, which also includes Tesco, Asda and Morrisons are engaged in a bitter price war as they battle for customers.
A combination of increased competition from discounters Aldi and Lidl, customers shopping around for bargains and a switch to convenience stores and online shopping has hit all of the main supermarkets.
However, Sainsbury's said that its general merchandise and clothing business had performed strongly, with sales up more than 6% on last year.
It also said its convenience store sales, an area supermarkets are increasingly focusing on, were strong with sales up 14%.