Blog: Dean BestSainsbury's King looks for positives in falling food volumes

Dean Best | 9 May 2012

Sainsbury's, the UK's third-largest retailer, today (9 May) issued a sales forecast that suggests food volumes will continue to fall in the months ahead - but, speaking to just-food, typically ebullient chief executive Justin King still looked for the positives.

The grocer today reported annual profits that beat City forecasts as sales increased, helping the company, it claimed, "outperform" the market and reach its highest market share for a decade.

However, rising prices boosted sales (King said Sainsbury's volumes fell by around 2%) and the retailer's comments on the outlook for volumes mean more unhappy reading for food manufacturers.

Last year, UK consumers putting less food in their shopping baskets, meaning food volumes fell for the first time in a generation and the industry would have been hoping for a recovery this year.

However, data issued by the British Retail Consortium this week suggested volumes remained under pressure in the early months of 2012 and Sainsbury's forecasts indicated that trend could continue.

Sainsbury's expects like-for-like sales in its 2012/13 financial year to be "similar" to the previous 12 months and it underlined that it believes food volumes will be negative.

Speaking to just-food, King said Sainsbury's forecast on volumes reinforced comments it had already made. He said the retailer had previously noted there would be "at least another year" of falling volumes after changes in the way consumers shopped since the latter part of 2010. "There had been a fundamental change in how customers shop," he said. Consumers were shopping more frequently, watching what they spend and wasting less, he noted.

In fact, King insisted Sainsbury's had sought to play a part, helping consumers waste less food to help them manage their spending and alleviate the retailer's impact on the environment. "It's something we've tried to drive," he said.

But falling volumes is hardly ideal for suppliers, is it? King said Sainsbury's was still growing its business and that would benefit manufacturers. "The conversation we are having with our suppliers is that we are also growing our business. We're giving them sales growth at the same time."


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