Mar 18 - Sainsbury's nine-year run of sales growth ends. As Hayley Platt reports it underlines the tough trading momentum for Britain's major grocers as pricing pressures increase.
They've been riding high for nine years. But Sainsbury's sales growth has come to an end. Cash-strapped shoppers spent less at the start of the year, pushing the UK's second largest grocer to a 3.1 percent loss. That compares to a rise of 3.6 percent for the same period last year. The group's outgoing CEO, Justin King says there's a good reason why. SOUNDBITE: Justin King, CEO, Sainsbury, saying (English): "A year ago we were in the middle of the horse meat scandal. For the industry we at Sainsbury's had no horsemeat and we benefitted hugely from that. So we're up against those tough numbers." The grocery market is growing at its slowest rate in nearly a decade. Last week, Morrison's, Britain's no 4, issued a profit warning sending shares across the sector crashing. The middle range 'big four', which includes Tesco and Asda, are all being squeezed. From the bottom by the so-called hard discounters, Lidl and Aldi. And at the top from up-market M&S and Waitrose. Kantar Retail's Bryan Roberts says its a result of some long term changes in the market place. SOUNDBITE: Bryan Roberts, Kantar Retail, saying (English): "I think the big one has been the willingness to shop at discounters and I think finally what we're seeing is Sainsbury being impacted by those as Lidl and Aldi continue to really grow market share." Sainsbury's has been fighting back with its value own-brand products. They now account for more than 50 percent of its turnover. The grocer has also managed to hold on to 17 percent of the market share. And says it expects to outperform its peers in the year ahead. But it won't be easy. SOUNDBITE: Justin King, CEO, Sainsbury, saying (English): "Average wage rises have been below inflation that means that customers have less money left over at the end of the month and although today we're looking perhaps forward to a year of lower inflation we may see a slight change but customers are cautious, rightly about the future and therefore they're keeping their spending tight." King leaves Sainsburys later this year after a 10 year reign. Few expect his successor to enjoy a similar decade of growth.