Sainsbury sales fall in Q1 since Asda deal demise

Bloomberg

J Sainsbury’s sales fell in the first quarter since its planned acquisition of Walmart’s Asda collapsed, underlining the need for a revamp of its UK supermarkets.
Comparable retail sales excluding fuel dropped 1.6 percent, with general merchandise, clothing and groceries all declining, the retailer said. The shares rose as much as 2.4 percent in London after an early dip, though they’ve lost more than one-fifth of their value this year.
Sainsbury’s weakness in a troubled UK retail market
contrasts with the relative strength of larger rival Tesco Plc, which has wielded its buying power to keep discounters Lidl and Aldi at bay.
In May, after UK antitrust authorities blocked its deal for Asda, Sainsbury pledged new investments aimed at improving its stores, cutting prices and expanding its online business.
The grocer said it will revamp 400 supermarkets this year, including technology upgrades, and improve its offer of beauty products.
“Although it has been a tough quarter in terms of the headline sales numbers, we continue to gain share in clothing and general merchandising categories,” Chief Executive Officer Mike Coupe said on a call. “This is a very competitive market. It’s early days and there’s lots of work to be done and progress to be made.”
Sainsbury joined other retailers in blaming bad weather after hot temperatures, the soccer World Cup and a royal wedding boosted sales for most UK grocers a year earlier. The company said it sold fewer paddling pools, barbecues and outdoor toys in the three months through June as a result.