Sainsbury's Justin King sees no need for price war on Aldi

Sainsbury's posted its first fall in sales for nine years yesterday, as outgoing chief executive Justin King said the market was now growing at its slowest rate since 2005.

But Mr King, who steps down at July's annual meeting, said he did not wish he had left the hot-seat earlier.

"I've still got one more trading statement and then the full-year figures to go," he said. "It would have been a pretty bad show by me, to have missed out a poor quarter or two."

Mr King also made it clear that he sees no need to follow rivals such as Morrisons down the path of sudden steep discounting. "Our own brand costs 20 per cent less than branded goods and now makes up 51 per cent of our sales," he added. "When the customer gets to the checkout with more Sainsbury brands in their basket than they used to, they soon realise that they are saving money."

Sales from stores which have been open at least a year, and excluding petrol, were down 3.1 per cent in the 10 weeks to last Saturday.

That was marginally worse than most analysts had expected, but not as disastrous as some had feared, in the immediate aftermath of Morrisons' figures last week. The shares ended the day 2.5p higher at 313.9p.

Mr King pointed out that the latest 10 weeks' trading had been affected by the weather and the later timing of both Mothering Sunday and Easter.

He said: "Discounters have been around for as long as I have. When I was account manager at Mars in the early 1980s, Kwiksave was a bigger account for us than Tesco.

"What I believe is happening is that customers are more engaged in more than just price. I always said at the start of the downturn that this would not be a race to the bottom on price, and I still believe that."

He also pointed out that Sainsbury's had managed to hold its market share at 17 per cent in the period. It also saw its convenience stores growing at 15 per cent and recording one million transactions a day for the first time.

Mr King said: "Although some economic indicators are showing an improvement in the health of the economy, we expect the outlook for customers to continue to be challenging for the coming year."

Richard Hunter of broker Hargreaves Lansdown pointed out that Sainsbury's shares have fallen 21 per cent in the past six months.

He said: "Investors' general ennui with the sector at present is perhaps best illustrated by the fact that Sainsbury's is currently the preferred play, even though the market consensus view comes in at no more than a 'strong hold'."

PROMOTED VIDEO
Arts and Entertainment
Outlaw Pete is based on an eight-minute ballad from Springsteen’s 2009 Working on a Dream album
arts + entsFirst tale will be about bank-robber called 'Outlaw Pete'
Sport
footballPremiership preview: All the talking points ahead of this weekend's matches
News
Angelina Jolie with her father Jon Voight
people
Arts and Entertainment
Tulisa as a judge on the X Factor in 2012
tvLouis Walsh confirms star's return
Life and Style
fashionClothes shop opens on Bill Clinton Boulevard in Pristina
Arts and Entertainment
Warner Bros released a mock-up of what the new Central Perk will look like
tv'Friends' cafe will be complete with Gunther and orange couch
News
Keira Knightley poses topless for a special September The Photographer's issue of Interview Magazine, out now
people
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
Life and Style
tech
Life and Style
food + drink
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SAS Business Analyst - Credit Risk - Retail Banking

£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...

Project Manager - Pensions

£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...

KYC Analyst, Birmingham - £200-£250 p/d

£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...

Test Manager - Banking - Yorkshire - £450 per day

£400 - £500 per day: Orgtel: Test Manager - Banking - West Yorkshire - £400-£5...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone