Continued cost inflation combined with intense completion from German discounters and a resurgent Morrisons, puts further pressure on Sainsbury’s who saw same-store sales rise 0.6 % going into the third quarter, well below the 2.3% second quarter growth recorded in July. In an attempt to appeal to ever more cost-savvy consumers, Sainsbury’s has followed in a similar vein to other retails and switched its pricing strategy from promoting special offers to a dubbed “low prices everyday”. Meanwhile 2,000 jobs were also announced to be cut from the retailer last month.
Losses over the summer at Argos, which Sainsbury's bought in September 2016, particularly dented bottom-line earnings, but Sainsbury's said that it was “well placed to navigate the external environment” as it runs well ahead of its cost-saving targets following the Argos acquisition and experiences a ‘halo effect’ with between 1 and 2% higher sales in Sainsbury’s outlets with a Argos attached.