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Sales decline at Sainsbury’s due to ‘cautious customers’

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Sainsbury’s has blamed “cautious customer spending” for a fall in sales in the third quarter, which includes the crucial Christmas period.

The UK’s second-largest supermarket chain, which has agreed to buy Asda for £15bn, said like-for-like retail sales, excluding fuel, fell 1.1% for the 15 weeks to 5 January.

While grocery sales rose 4% in the quarter, non-food trading — general merchandise sales and clothing sales — declined 2.3% and 0.2% respectively..

Mike Coupe, chief executive of Sainsbury’s, said: “Sales declined in the quarter due to cautious customer spending and our decision to reduce promotional activity across Black Friday. Clothing performed well, with strong full price sales growth in a tough market.

“Retail markets are highly competitive and very promotional and the consumer outlook continues to be uncertain.”

Rival Morrisons, Britain’s fourth-biggest supermarket group, reported a sharp slowdown in sales growth at its stores over Christmas on Tuesday. The country’s biggest supermarket Tesco will reveal its trading over the crucial festive period on Thursday.

In contrast to the big four chains, discount rival Aldi said on Monday it had enjoyed its best ever festive period with sales of nearly £1bn in December and growth of 10% in the week before Christmas as it saw an “influx” of shoppers switching from rivals.

Aldi, together with fellow discounter Lidl, has shaken up the sector by eating away at the market share of the major players and prompting them to compete more fiercely on price.

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