The Aldi and Lidl price war is killing Sainsbury's
The British supermarket said in its first quarter results that like-for-like sales, excluding fuel, for the 12 weeks to June 6, fell by 2.1%
In a statement, the grocer's boss highlighted how Sainsbury's continues to be hit badly by the price war between Britain's supermarkets.
"Trading conditions are still being impacted by strong levels of food deflation and a highly competitive pricing backdrop," Sainsbury's CEO Mike Coupe said.
"These pressures, including the effect of our own targeted price investment, have led to a fall in like-for-like sales for the quarter. We outlined in our Strategic Review in November some of the key actions we would be taking to remain competitive in this environment and are encouraged by some of the early trends that we are seeing in our key trading and operational metrics."
Sainsbury's, alongside other major British supermarkets, is battling for market share in the face of aggressive competition from cheap and cheerful newcomers like Aldi and Lidl. Sainsbury's is slashing prices in order to remain competitive, but this means it's collecting less at the tills.
According to Kantar Worldpanel data released last month, Sainsbury's market share has risen just 0.1% over the last three years, rising from 16.4% in 2012 to 16.5% in 2015. This may seem impressive considering Britain's biggest supermarket, Tesco, has lost 2.3% over the same period. But German budget grocers Aldi and Lidl have grown incredibly rapidly over the same period.
Aldi increased its market share to 5.4% this year, from 2.9% in 2012. Lidl's market share rose to 3.9% from 2.8% over the same period.
