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LONDON, June 11 Britain's J Sainsbury
posted a second straight fall in quarterly underlying sales,
bringing a disappointing note to Chief Executive Justin King's
preparations to step down after 10 years at the helm.
The group, which trails market leader Tesco and is
battling with Wal-Mart Stores' Asda to be the UK's No. 2
supermarket, said sales at stores open over a year fell 1.1
percent, excluding fuel, in the 12 weeks to June 7, its fiscal
That compared to analysts' forecasts of down 0.5-1.5 percent
and a fall of 3.1 percent in the fourth quarter of Sainsbury's
The fourth quarter decline followed unbroken positive sales
for the best part of nine years. King will be succeeded by
commercial director Mike Coupe following Sainsbury's annual
shareholders' meeting on July 9.
The firm said it was confident it would outperform its
supermarket peers through the remainder of the year.
The grocer last month forecast underlying sales growth for
the year similar to the 0.2 percent achieved in 2013-14.
That is significantly better than expectations for Tesco
and Morrisons who have both flagged negative
like-for-like sales as they cut prices.
Britain's grocery market is growing at its slowest rate for
11 years and its so called "big four" players are all being
outpaced by sales growth at discounters Aldi and
Lidl, while upmarket chains Waitrose and
Marks & Spencer are also gaining share.
Last week Tesco reported its worst quarterly performance for
Consumers are shopping around to save money and are wasting
less, shying away from big weekly shops to buy little and often
in local convenience stores and buying more online.
To counter the discounters Tesco, Asda and Morrisons have
all pledged to cut prices - moves King has called a "skirmish".
But Sainsbury's has vowed to remain competitive on price,
raising analysts' concerns about a possible price war hitting
earnings across the industry.
The grocer reckons it can set itself apart from rivals with
a strategy that focuses on own-brand products, on the quality,
provenance and ethical credentials of its food and on investment
in convenience and online, the two fastest growing channels.
Currently, monthly industry data published last week showed
Asda as the best current performer of the "big four", with
Sainsbury's market share slipping 0.2 percent to 16.5 percent
Shares in Sainsbury's, down 9.6 percent so far this year,
closed Tuesday at 329.8 pence, valuing the business at 6.3
The group's total first quarter sales rose 1.0 percent,
(Reporting by James Davey; editing by Kate Holton)