Sainsbury's has posted a drop in like-for-like sales over the Christmas trading period.
The retailer's sales at stores open at least a year fell by 1.7 per cent excluding fuel in the 14 weeks to 3 January.
Total sales, meanwhile, fell 0.4 per cent, and Sainsbury's has warned the outlook for the rest of the financial year will 'remain challenging'.
However, the Big Four retailer said the week before Christmas was a 'record', with 29.5 million customer transactions.
The latest figures were also an improvement on the previous quarter, when like-for-like sales excluding fuel fell by 2.8 per cent.
Sainsbury's chief executive Mike Coupe noted:'The trend of more frequent and local shopping continues and we saw growth of over 16 per cent in our convenience business in the quarter.
'As well as over six million convenience customer transactions in the week before Christmas, we also saw our largest ever day for convenience sales on 24 December, taking over £8m. For our groceries online business, this Christmas was our biggest to date. In the three days to 23 December, our online team delivered more than 110,000 orders.'
Of the Q3 performance, David Gray, a retail analyst at retail insight firm Planet Retail, said: “This morning’s sharp decline in like-for-like sales shows Sainsbury’s suffering can only intensify as the effects of a new retail reality bear down hard on company performance. Declining sales and profits have fast become the norm for an industry that for so long basked in profit growth year after year.
“Sainsbury’s numbers are underpinned by some of the toughest market conditions in a generation, with the era of rising industry food values coming to an end as food price inflation falls back. Combine this with the twin threats of falling food volumes and the seemingly unstoppable rise of the hard discounters and there really is nowhere to hide for Sainsbury’s new boss.
“These horrendous conditions make it nigh-on impossible for Sainsbury’s to grow profits, in the short term at least, without raiding its valuable property portfolio. Sainsbury’s also looks increasingly behind the curve in terms of realigning its floorspace requirements, with larger rival Tesco having moved much earlier to combat hypermarket space issues.'
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