Sainsbury’s run of sales growth comes to an end

​The grocer, which has been the strongest performer among the big four, said like-for-like sales fell 3.1 per cent in the 10 weeks to March 15.

Sainsbury’s has been hit the least by the rise of the discounters as it is more mid market than its three cheaper rivals, market-leader Tesco, Leeds-based Asda and Bradford-based Morrisons.

Sainsbury’s outgoing chief executive Justin King said he did not agree with Morrisons’ chief executive Dalton Philips, who claimed last week that the rise of the discounters has had as big an effect on the grocery sector as the launch of the supermarket in the 1950s.

“It’s wrong to characterise what’s happening as something completely new because discounters have been ever present in my 30 years,” said Mr King.

“There have been times when they’ve had significantly larger market share than they have today,” he said, adding that discounters had a 12 per cent share of the market in the early 1990s compared with the current 7.5 per cent.

Mr King said that price cuts are “part of the cut and thrust of this market”.

Last week Morrisons posted its lowest annual profit for five years, issued a profits warning and increased the likelihood of an industry price war after saying it would invest £1bn in price cuts over the next three years to win back customers from discounters.

The move follows similar proposals from Tesco and Asda.

Sainsbury’s said its prices will stay competitive and it has already cut the price of staples such as milk, bread and eggs.

​Commercial director Mike Coupe, who will succeed ​Mr King in July, ​said: “If and when we see that activity come forward we will match the prices. We will maintain our price position as we always have done.”

Analyst Clive Black at Shore Capital said the figures will be a “particular disappointment” for Mr King, who is stepping down after 10 years.

“We will be interested to see how Sainsbury’s approaches the greater discount challenge,” he said. “Whilst it is not losing out to the same extent as its peers, we do not believe that Sainsbury’s is blind to the challenge.”

​Sainsbury’s faced a tough comparison with early 2013 when the horsemeat scandal hit many of its rivals and an earlier Easter and Mother’s Day boosted first quarter trading.

​Unlike its peers, the group has managed to hold on to its market share against the discounters. Sainsbury’s share of the market was static at 17 per cent in the 12 weeks to March 2, according to the latest Kantar Worldpanel data.

​Sainsbury’s said ​its focus on own brand products and its Nectar loyalty card should enable it to outperform peers in the year ahead.

Sainsbury’s ​said its ​own​ label ranges​ are already 20​ per cent​ cheaper than ​their ​branded equivalents and now make up more than half of all sales.

​It has also seen growth in its clothing ranges, boosted by a collaboration with designer Gok Wan.

Sainsbury’s has a significant presence in the two key growth areas of the market – convenience stores and online delivery.