Sainsbury's sales fall for the first time in nine years as retailer warns of tough market conditions

Outgoing boss  warns industry is growing at 'its slowest pace since 2005'

Sainsbury’s has reported its first fall in sales for nine years as outgoing chief executive Justin King warned the market is growing at its slowest rate since 2005.

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

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

King also made it clear that he sees no need to follow rivals such as Morrisons down the path of sudden steep discounting.

He said: “Our own brand costs 20 per cent less than branded goods and now makes up 51 per cet of our sales.

"When the cutomer gets to the checkout with more Sainsbury brands in their basket than they used to, they soon realise that they are saving money.”

Sainsbury’s 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 distastrous as some had feared, in the immediate aftermath of Morrisons’ figures last week. Shares fell only 0.5p to 310.9p.

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 Eighties, 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% in the period. It also saw its convenience stores growing at 15% and recording one million transactions a day for the first time.

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 shares have fallen 21% 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’.”

Start your day with The Independent, sign up for daily news emails
Voices
Lucerne’s Hotel Château Gütsch, one of the lots in our Homeless Veterans appeal charity auction
charity appeal
Sport
Raheem Sterling of Liverpool celebrates scoring the opening goal
footballLIVE: Follow all the latest from tonight's Capital One quarter-finals
Life and Style
A woman walks by a pandal art installation entitled 'Mars Mission' with the figure of an astronaut during the Durga Puja festival in Calcutta, India
techHow we’ll investigate the existence of, and maybe move in with, our alien neighbours
Arts and Entertainment
Tony Hughes (James Nesbitt) after his son Olly disappeared on a family holiday in France
tv
PROMOTED VIDEO
News
people

Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt

Arts and Entertainment
Sir Ian McKellen tempts the Cookie Monster
tvSir Ian McKellen joins the Cookie Monster for a lesson on temptation
Arts and Entertainment
Jim Carrey and Jeff Daniels ride again in Dumb and Dumber To
filmReview: Dumb And Dumber To was a really stupid idea
News
i100
Life and Style
tech
Life and Style
Sebastian Siemiatkowski is the 33-year-old co-founder and CEO of Klarna, which provides a simple way for people to buy things online
tech
News
ebooksNow available in paperback
Voices
Jimmy Mubenga died after being restrained on an aircraft by G4S escorts
voicesJonathan Cox: Tragedy of Jimmy Mubenga highlights lack of dignity shown to migrants
News
Not quite what they were expecting
news

When teaching the meaning of Christmas backfires

News
i100
Arts and Entertainment
Angelina Jolie and Sony Pictures co-chairman Amy Pascal at the Golden Globes in 2011
film
Extras
indybest
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

Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

Ashdown Group: Java Developer - North West London - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Selby Jennings: Corporate Communications & Marketing Specialist – Geneva

120,000 - 150,000 chf + bonus: Selby Jennings: A leading Swiss Private Banking...

Day In a Page

Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Scandi crush: Stockholm is rivalling Silicon Valley

Th Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'
Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

Meet Racton Man

Analysis shows famous skeleton was a 6ft Bronze Age superman
Garden Bridge: St Paul’s adds to £175m project’s troubled waters

Garden Bridge

St Paul’s adds to £175m project’s troubled waters
Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

Stuff your own Christmas mouse ornament

An evening class in taxidermy with a festive feel
Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

Joint Enterprise

The legal doctrine which critics say has caused hundreds of miscarriages of justice
Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

Freud and Eros

Love, Lust and Longing at the Freud Museum
France's Front National and the fear of a ‘gay lobby’ around Marine Le Pen

Front National fear of ‘gay lobby’

Marine Le Pen appoints Sébastien Chenu as cultural adviser
'Enhanced interrogation techniques?' When language is distorted to hide state crimes

Robert Fisk on the CIA 'torture report'

Once again language is distorted in order to hide US state wrongdoing
Radio 1’s new chart host must placate the Swifties and Azaleans

Radio 1 to mediate between the Swifties and Azaleans

New chart host Clara Amfo must placate pop's fan armies
Homeless Veterans appeal: 'It's life, and not the Forces, that gets you'

Homeless Veterans appeal: 'It's life, and not the Forces, that gets you'

The head of Veterans Aid on how his charity is changing perceptions of ex-servicemen and women in need
Torture: It didn't work then, it doesn't work now

Torture: It didn't work then, it doesn't work now

Its use is always wrong and, despite CIA justifications post 9/11, the information obtained from it is invariably tainted, argues Patrick Cockburn
Rebranding Christmas: More public bodies are refusing to give the festival its name for fear of causing offence

Rebranding Christmas

More public bodies are refusing to give the festival its name for fear of causing offence. They are missing the point, and we all need to grow up