Sainsbury’s first quarter grocery sales slowed to 0.5 per cent growth after cutting prices in fruit and vegetables.
The figure represents just a quarter of its last trading statement, which saw 2.1 per cent growth. The retailer saw a decline in total retail sales to 0.8 per cent, down from previous quarter’s 1.3 per cent.
Chief executive Mike Coupe’s company decided to invest £150 million in March by cutting prices on 930 store products to compete against its big-four rivals. He admitted that the new figures were to be expected following the price reductions.
“I am pleased with our progress in the quarter. The headline numbers reflect the level of price reductions we have made in key areas like fresh meat, fruit and vegetables since March.
“Our price position has improved and customers have responded well, resulting in a continuation of the improved volume trend we saw in the second half of last financial year,” he said.
He also revealed that a £3.5 billion finance package from lenders for the Asda merger had been struck “on attractive terms”, saying the deal will create a “dynamic new player in UK retail'.
“We have successfully agreed a financing package of £3.5bn in relation to the proposed combination. The financing has been raised on attractive terms, reflecting the confidence of the lending banks in the outlook for the proposed combined business,' Coupe said.
