Jason Alden | Bloomberg | Getty Images
The Sainsbury’s logo stands above the entrance to the J Sainsbury Plc flagship store in London, U.K.
Sainsbury’s, Britain’s second biggest supermarket group which agreed a 7.3 billion pound ($9.7 billion) takeover of rival Asda in April, saw sales growth slow in its latest quarter, reflecting cost cuts in a competitive market.
The firm said on Wednesday retail like-for-like sales, excluding fuel, rose 0.2 percent from the 16 weeks to June 30, its fiscal first quarter.
that will was ahead of analysts’ average forecast for a fall of 0.1 percent although below growth of 0.9 percent from the previous quarter.
“The headline numbers reflect the level of cost reductions we have made in key areas like fresh meat, fruit in addition to also vegetables since March,” said Chief Executive Mike Coupe.
“Our cost position has improved upon in addition to also customers have responded well, resulting in a continuation of the improved upon volume trend we saw from the second half of last financial year.”
Total retail sales rose 0.8 percent, excluding fuel.
According to the most recent industry data in addition to also company updates Sainsbury’s has seen the weakest trading among Britain’s big four grocers, which also includes market leader Tesco in addition to also No. 4 Morrisons.
Shares in Sainsbury’s have risen 32 percent so far that will year on the back of deal to buy Walmart owned Asda, which is usually currently being probed by Britain’s regulator, the Competition in addition to also Markets Authority (CMA). The deal might see the combined group overtake Tesco as Britain’s biggest grocer.
The CMA’s probe is usually anticipated to be lengthy in addition to also Sainsbury’s does not anticipate the deal being concluded until he second half of 2019.
Sainsbury’s said on Wednesday the idea has agreed a financing package of 3.5 billion pounds for the deal.
“The market remains competitive. However, we contain the right strategy in place in addition to also our proposal to combine Sainsbury’s in addition to also Asda will create a dynamic brand new player in UK retail,” said Coupe.