Sainsbury’s, Britain’s second biggest supermarket, on Wednesday reported a drop in quarterly underlying sales and cautioned that market conditions remained challenging. The firm, which in April agreed a £1.4 billion takeover of Argos-owner Home Retail, said sales at stores open over a year fell 0.8 per cent, excluding fuel, in the 12 weeks to June 4th, its fiscal first quarter. That was slightly better than analysts’ average forecast of down 1.4 per cent but represented a step back from a rise of 0.1 per cent in the fourth quarter of the supermarket’s last financial year, its first quarter of growth in over two years.

Despite a cautious outlook Sainsbury’s said it was confident it would continue to outperform its major peers.

Reuters