Sainsbury's had managed to avoid the sort of share sell-offs seen elsewhere in the supermarket sector in recent months, but its stock has slumped today in the wake of its first-half results.
These revealed that the firm had posted an 18 per cent call in profit to £308m, the BBC reports. This was on the back of a fall in like-for-like sales – a measure of actual sales revenues in stores that have been open at least one year – of 1.6 per cent. Food sales declined by one per cent and sales at larger supermarkets fell by two per cent.
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This price is still above the 225p at which it languished in mid-September, however, before a third quarter update that revealed full-year profits would come in ahead of analysts' lowly expectations and that, underneath the falling sales caused by an ongoing price war, the brand's fundamental sale picture was positive.
Many of the more upbeat messages were being emphasised again today. The company pointed to a fall in overall sales of just 0.1 per cent, as convenience stores – where it is expanding rapidly (see below) - saw sales jump 11 per cent, online orders rose seven per cent and clothing sales increased 10 per cent. The company is also expecting the Christmas sales season to be strong.
Simon Hathaway, president and global chief retail officer at public relations analyst Cheil, told Marketing magazine that the city had been "expecting the falls to be steeper" and that he was "actually pleasantly surprised at the results".
"Yes, profits are down but if you look at things closely Sainsbury's has made £150m in price and still delivered a 6 per cent increase in total income," Hathaway said. "I'd say that Sainsbury's is going about things the right way and its investment in price will pay dividends."