Tesco and Sainsbury's sales hit as consumers cut back on spend
Supermarkets Tesco and Sainsbury’s have highlighted the pressures being put on British consumers, as they revealed their sales results, with Tesco seeing its largest fall in underlying sales, while Sainsbury’s saw a slight increase.
The results show that consumers have been reducing their spend as prices rise, while pay rates remain flat as the economy fails to recover.
Tesco warned that its second half year profits in the UK would be flat, as it saw a decline of 0.9%, having invested £500m in a cost cutting drive, as it aims to compete with Asda for market share.
This is the worst financial performance by the supermarket brand for 20 years.
Sainsbury’s said, meanwhile, that its sales in the second quarter rose by around 1.9%m as a result of its expansion into convenience stores, online shopping and non-food products.
Sainsbury’s added that it expected the market to remain ‘very competitive’ in the foreseeable future.