SUPERMARKET chain Sainsbury’s slashed sales forecasts for the all-important Christmas and New Year period, blaming the most challenging trading conditions in 30 years.
The group is having to contend with “promiscuous shoppers” – consumers who shop at four or five different stores rather than the two or three they used to frequent a few years ago – and the rise of the German discounters Aldi and Lidl, which have prised away middle class Sainsbury’s shoppers with the lures of champagne, lobster and caviar at low prices.
Sainsbury’s is hoping to beat the discounters at their own game by bringing back Danish discounter Netto, which quit the UK in 2010 when Leeds-based Asda bought its stores.
Sainsbury’s said the joint venture with Netto will bring “a fresh Scandinavian flavour to the UK discount sector”.
Five Netto stores will open in the North of England, primarily in areas around Leeds and Manchester, in the first week of November.
Sainsbury’s chief Executive Mike Coupe, who succeeded Justin King in July, said: “Our plan is to trial 15 stores.
“It’s very much something for the medium and long term. We’ve got a good sense of the market.”
Sainsbury’s said like-for-like sales for the 16 weeks to September 27 fell 2.8 per cent.
Mr Coupe said the fall is likely to happen again in the second half (October to March).
The group had previously pencilled in growth of 0.2 per cent.
Mr Coupe said UK market conditions are the most challenging he has experienced in his 30-year career in retail.
“Customers have more choice today than they’ve ever had and they’re shopping around more than they have ever done,” he said.
Sainsbury’s has switched focus for its Brand Match comparisons to Asda, which began cutting prices a year ago and is the only one of the big four grocers to hold market share over the period.
“Customers perceive Asda as the price leader in the market place,” said Mr Coupe.
“A comparison with Asda was far and away the most overwhelming choice of customers.”