SUPERMARKET firm Sainsbury’s became the latest casualty of sliding food inflation as sales growth stuttered in its latest quarter.
The UK’s third-biggest grocer said like-for-like sales excluding petrol rose by 1.1% in the 12 weeks to June 12 – the lowest level of sales growth since 2004.
That matches the 1.1% sales growth reported by market leader Tesco – as both firms struggled with comparisons against a period of rising food prices last year.
Sainsbury’s, which has stores at Market Street and Shore Head as well as smaller outlets at Salendine Nook and Lindley, said its World Cup ranges were selling well – including the vuvuzela horns which have been the soundtrack of the tournament so far.
The retailer has sold 40,000 England-branded vuvuzelas so far at £2 each and expects to shift 75,000 over the course of the competition.
On Saturday, when England played their World Cup opener against the USA, Sainsbury’s sold a vuvuzela every two seconds.
Despite the trading boost from the tournament, the supermarket expects consumers to remain under pressure as next week’s emergency Budget looms – along with potential tax hikes to tackle the deficit.
But the firm said trading was in line with expectations, while a drive to expand had paid dividends with new stores performing more strongly than expected.
Sainsbury’s remains on track to open 1.45m sq ft in new space during the current financial year as competition for hard-pressed shoppers intensifies.
Seymour Pierce analyst Freddie George said the Sainsbury’s figures would have been helped by 12 days of trading in June during the build-up to the World Cup.
But he said he remained concerned about prospects for the sector.
He said: “Although underlying inflation is beginning to pick up, competition has intensified and promotional activity has once again moved up a cog.”