Pressure on Davis as Sainsbury's suffers

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The Independent Online

J Sainsbury chief executive Sir Peter Davis will face pressure from shareholders this week when the supermarket chain unveils another set of disappointing sales figures.

Sainsbury's is due to update the City on second-quarter trading on Friday and analysts are seeking like-for-like sales growth ranging from flat to a 1 per cent improvement. Says one: "I don't expect much more than 0.5 per cent. It must have got at least some boost from the warm weather but market share is going backwards for Sainsbury's."

The second-quarter figures include the impact of petrol sales and store extensions and the analyst believes that once these factors are stripped out, the figures could be down by 3 per cent. That compares badly with Sainsbury's rivals and puts more pressure on Sir Peter, who returned to the chain in 2000 charged with reviving the business.

Market leader Tesco, until recently Sainsbury's closest rival - it was knocked off the number two spot by Wal-Mart-owned Asda - reported second-quarter sales growth of 6.3 per cent, up on a 5.8 per cent rise in the first quarter. Sainsbury's reported growth of just 0.3 per cent in the first quarter, down on the previous year's 2.7 per cent rise.

Supermarkets benefited from the heatwave as demand for ice-cream and beer soared. Non-food items like barbecues and T-shirts also thrived but Sainsbury's lagged, only unveiling its homeware range last month.