Sainsbury has revealed a slump in fourth quarter like-for-like sales and warned that its radical restructuring programme in the UK would hit profit over the next year.

For the 12 weeks to March 27 like-for-likes were down 0.9% on last year. Group chief executive Sir Peter Davis blamed an “increase in price competition as the food retail market place reacted in anticipation of Morrisons’ acquisition of Safeway”.

Total sales at its UK supermarkets rose 0.8% including petrol.

Sainsbury said it was currently negotiating to “purchase 20 stores from three other retailers” and that there would be “further opportunities to improve the portfolio and strengthen its market position”.

Sir Peter added that it had been “a tough year for Sainsbury's”.
He said the company was “looking forward” to Justin King - former head of food at Marks and Spencer - joining the group as chief executive next week.

Sir Peter concluded: “When our modernisation programme is behind us we will be in a position to invest more in price and quality in order to drive sales growth.”