Sainsbury's sales fall AGAIN as Justin King jumps ship
It’s the second time that Sainsbury’s have reported a loss –previous to that, it had nine unblemished, consecutive years of growth.
So what’s the problem? Well, we all know the impact that the budget supermarkets have had on the more mid-range stores, but they’re also feeling the pinch of food deflation – all those £1 cartons of milk are starting to take their toll on sales figures.
Mr King said, while clearing his desk and packing his bags for Florida:
‘Lower food price inflation and reduced fuel prices are a welcome respite to customers' finances but they continue to spend cautiously, leading to industry growth in the quarter being the slowest in a decade. Throughout the quarter we have continued to invest in reducing prices and improving quality, increasing the value of our offer.’
But is this approach working? King says he’s confident that the strategy will still put them in a better position than Tesco, who are struggling with their worst quarter in 40 years.
However, it remains to be seen whether that strategy will change when group commercial director Mike Coupe takes over in July. After all, their Taste the Difference posh range was up 10% this quarter, which surely points at a need for them to become more upmarket, rather than reduce prices to compete with the budget supermarkets?
Honestly, let me give them a 10 minute Powerpoint presentation and I'll sort it myself.