Sainsbury's First Quarter Adds to Signs of U.K. Slowdown
Supermarket chain J. Sainsbury added to signs of a slowdown in British spending on Wednesday, becoming the second major retailer to report lower-than-expected first quarter trading in as many days.
Britain's third largest supermarket group posted a 5.1% rise in U.K. like-for-like sales excluding fuel for the 12 weeks to June 16, below the average forecast by analysts.
The operating environment remained "competitive", it said in a statement.
Sainsbury reported a day after leader Tesco posted a slow down in its first quarter and predicted a "tougher year" on signs four interest rate hikes in 10 months had made consumers wary.
"It does look like things are starting to slow down," Seymour Pierce analyst Andrew Wade told Reuters. Sainsbury's trading update was a "touch below" his expectations, he said.
Sainsbury was expected to post a rise of around 5.4%, a survey of four analysts by Reuters showed. Their forecasts ranged from 4.8% to 5.7%.
It was Sainsbury's toughest quarterly comparative since Chief Executive Justin King began his turnaround nearly three years ago with unusually warm weather and the World Cup last June having helped it to a 5.7% rise in underlying sales.
Sainsbury said its total sales in the first quarter this year rose 5.7%.