UK

Sainsbury's Sales Fall Again, But By Less Than Rival Supermarket Tesco

11/06/2014 11:21 BST | Updated 11/06/2014 11:59 BST
Dan Kitwood via Getty Images
LONDON, ENGLAND - MARCH 04: CEO of Sainsbury's Justin King prepares to greet South African President Jacob Zuma to a store in North Greenwich on March 4, 2010 in London, England. (Photo by Dan Kitwood/Getty Images)

Sainsbury's revealed lower underlying sales for a second quarter in a row, as Britain's supermarket giants continue to suffer a tough spring, but is enjoying better results than its troubled rival Tesco.

Sainsbury's boss Justin King, who is leaving the chain next month after a decade at the helm, said that consumers were continuing to spend cautiously, as the supermarket revealed that like-for-like sales, excluding fuel, had slid 1.1% in the 12 weeks to June 7.

King said: "We expect customer spending to remain cautious and we will continue to invest to keep our offer competitive to help customers balance their household budget."

By contrast, Tesco was rocked after suffering a 3.7% slide in like-for-like sales, leading former chief executive Sir Terry Leahy to admit he was "disappointed" with the results.

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All four supermarket giants have found themselves under pressure due to the rapid growth of German discount chains Aldi and Lidl, which have enjoyed an increasing share of the market.

Aldi saw its market share rise from 3.4% to 4.6%, while Lidl saw a "record-breaking month" that left it accounting for 3.4% of the market, according to research firm Kantar Worldpanel.

In the previous quarter, Sainsbury's suffered a like-for-like sales drop of 3.1%, marking its first decline in nine years, capping off growth of 0.2% across the financial year.

King said at the time: "The market is now growing at its slowest rate since 2005, with falling food inflation in particular benefiting customers."

He added: "Although some economic indicators are showing an improvement in the health of the economy, we expect the outlook for customers to continue to be challenging for the coming year."