Supermarket group Sainsbury’s today said its full-year profits were set to come in ahead of City forecasts despite posting another quarter of declining sales.
The grocer said like-for-like takings in the second quarter were down 1.1 per cent, although that marked an improvement on the 2.1 per cent slide seen in the first three months of its financial year.
Chief executive Mike Coupe said: “During the quarter we saw an improvement in our key trading metrics. Both volume and transactions grew as the decline in average basket spend in supermarkets continued to stabilise.
“Whilst the market is clearly still challenging, with food deflation impacting many categories, we are making good progress on delivering our strategy.”
As a result, Coupe said the grocer’s full-year underlying profit before tax was now expected to be “moderately” ahead of analysts’ consensus forecasts of £548 million.
However, that would be down from the £681m profit delivered for the year to 14 March.
John Ibbotson, director of retail consultant Retail Vision, said: “UK supermarket retailing has undergone a seismic shift, driven by the arrival of the discounters, new online shopping patterns, sector-wide price-cutting and general food price deflation. And now it has the living wage to deal with.”