Sainsbury’s sales figures reveal a tough time for multiples

In the last quarter Sainsbury’s sales rose by 1.7% year on year, compared to 3.7% in the previous six months.

For local shopkeepers in the UK, this is a useful figure to benchmark your sales against. If you have been tracking 2% in the first three months of this year, then you have been doing better than one of the big four supermarkets.

A big chunk of the fall is because food inflation has dropped to 1%. The second reason is because shoppers have less money to spend.

At the same time, Sainsbury’s reports that it had increased its weekly transactions from 18 million to 19 million year on year, which is a 5.6% increase. In the last quarter, all sales, including those from new sites, were up 4.4%. This means that the average spend is falling.

However, new shops include 51 convenience stores out of 102 new and extended sites, so perhaps that explains it. Even so, as the VAT rate, which is included in the sales figures, has returned to 17.5% in the latest quarter, you can see that the supermarkets are under pressure.

Anecdotal feedback from food wholesalers, who mainly supply local shops like yours, suggests that they are feeling like Sainsbury’s. Feedback from independent retailers visiting the Convenience Retail Show in Birmingham last week suggests that good independents are doing slightly better than Sainsbury’s.

Remember, there is no need to put yourself under unnecessary pressure. If your growth is in low single figures and profits are holding up, then you are probably doing most things right. That is what good looks like at the moment.