Under pressure Sainsbury's suffers fresh sales slide

Total retail sales excluding fuel fell by 1.2 per centduring the latest period, as the group said it was impacted by a 'tough retail environment'. Picture: Contributed

The chief executive is also likely to face criticism from some investors following the collapse of the company's planned mega-merger with US-owned rival Asda earlier this year.

In a trading update, Sainsbury's said like-for-like sales fell by 1.6 per cent in the 16 weeks to 29 June, as its decline accelerated from 0.9 per cent in the previous quarter.

Total retail sales excluding fuel fell by 1.2 per cent during the latest period, as the group said it was impacted by a "tough retail environment".

Grocery sales dipped 0.5 per cent over the period, as the decline in sales slowed down from 0.6 per cent in the previous period. Sainsbury's also reported sales slumps of 3.1 per cent and 4.5 per cent respectively for its general merchandise and clothing divisions.

The figures come just months after the competition watchdog blocked the firm from joining forces with fellow "Big Four" supermarket chain Asda.

Sainsbury's has tried to win over shoppers in recent months by lowering prices, with reductions on more than 1,000 food and grocery items. It is also committed to reduce its net debt by at least £600 million over the next three years.

A major store investment programme will see improvements made in hundreds of branches across the UK.

Coupe said: "We continue to adapt our business to changing shopping habits and made good progress in a challenging market. We reduced prices on over 1,000 everyday food and grocery products and improved our relative performance.

"In a tough trading environment, we gained market share in key general merchandise categories and in clothing, where we are now the UK's fifth largest retailer by volume."

Analysts at Shore Capital noted: "We most recently set out our sell investment thesis on Sainsbury's shares in our preview to this trading update.

"That view does not yet change, noting as we do challenging market conditions for the UK supermarkets at this time, set against quite tough comparatives but also ongoing weakness in the British consumer's sentiment, weakness that is likely to limit positive like-for-like sales growth for much of Q2 and Q3.

"Additionally, the competitive environment for Sainsbury's does not ease with its largest mainstream adversary, Tesco, in stronger shape whilst the limited assortment supermarkets (LAS) continue to open space and gain share apace."