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Sainsburys Food Sales Still Falling

Sainsburys reported that sales fell by 1.2% in the final quarter of 2004 (compared to the same period in 2003). The fall follows on from a 1.1% fall in the the third quarter of the year (all figures exclude petrol sales).

Such figures may not make pleasant reading for Sainsburys shareholders but the company was keen to stress that the fall fell to 0.4% over the Christmas period that is viewed as being so important for retailers.

Despite that improvement, the company continues to warn that trading conditions are difficult. Chief Executive Justin King foresees a "challenging" period ahead in the first quarter of 2005 and admitted to some disappointment at the figures.

Nevertheless, he suggested that he was receiving positive feedback from Sainsburys customers.

Retail analysts point to increased competition from the likes of Tesco and Asda (part of the Wal-Mart chain) as the root cause of many of the company's problems. Long gone, it seems, are the days when Sainsburys ruled the roost among UK supermarkets.

Figures from TNS showed that Sainsbury's share of the supermarkets sector was at 15.9% in the final quarter of 2004. This leaves it a long way behind Tesco (29%) and fighting it out with the likes of Asda (17.1%) and Morrisons/Safeway (12.4%).