Sainsbury's has followed Tesco’s lead by reporting sales below stock market expectations.
The Sainsbury's like-for-like figure excluding petrol rose 5.1 per cent in the three months to June 16. But analysts had expected a rise of 5.4 per cent and although Sainsbury's has now registered continuous growth for 10 successive quarters, the City has caught onto the slowdown fast.
Tesco shares fell by nearly five per cent yesterday, dropping it to the bottom of the FTSE 100 index, after reporting its slowest sales rise in a year.
Like Tesco, Sainsbury’s is blaming the “competitive” UK trading environment and said it has cut prices to boost demand. It also said its ongoing rise in sales was helped by its efforts to improve stock levels and availability.
"It does look like things are starting to slow down," said Seymour Pierce analyst Andrew Wade.
"This is particularly pleasing as the quarter included some very tough comparatives in the final few weeks driven by the football World Cup and the very warm weather last June," said Sainsbury’s ceo Justin King.
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