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Sainsbury’s says it will continue to invest in multichannel in the search for growth; Iceland Foods reports on first year online

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Sainsbury’s today said it would continue to invest in online, multichannel and convenience as it looks for future growth.

The supermarket reported falling first-quarter sales, with total sales excluding fuel down by 0.6% in the 12 weeks to June 6, compared to the same time last year. Like-for-like sales, which strip out the effect of store openings and closures, were down by 2.1%, again excluding fuel.

Chief executive Mike Coupe said sales were hit by falling food prices in a competitive market, but he said convenience store sales were growing at a double digit rate, and that the supermarket continued, “to make it easier for customers to shop with us whenever and wherever they want” through services such as click and collect. Sainsbury’s now has 20 grocery click and collect sites, and plans to have 100 by the end of 2015. Its online grocery service notched up a record week during the quarter, with 256,000 orders. Over the summer it will take its online clothing service nationwide.

Three new digital Argos stores have now opened in branches in North Cheam, Nantwich and West Hove, and 10 are planned for the first half.

“We continue to invest in our broad range of products and services and our multiple channels to market,” said Coupe. “These areas represent strong future growth opportunities and contribute towards our resilience in the current trading environment.”

• Meanwhile, Iceland Foods today reported its results in the year to March 27, a year in which the supermarket took its online shopping service national.

The company reported sales of £2.69bn in the year, some 0.5% down on last year’s £2.71bn. Like-for-like sales, which strip out the effect of store openings and closures, were down by 4.4% but were offset by sales from 43 new stores opened during the previous financial year, and 28 stores that opened during the financial year reported on. Adjusted earnings before interest, tax, asset writedowns and exceptional items came in at £150.2m, down from £202.2m the previous year after costs including those of online and international expansion. By the end of the year, the service covered about 84% of the population, and delivered sales, including both those ordered online and in-store, regularly came to more than 200,000 orders a week.

In its results statement, the company said: “Iceland has not been immune to the pressures in its market place but we are strategically well positioned for the new retail environment through our focus on conveniently located neighbourhood stores, our well-established reputation for excellent value, and our nationwide online shopping service.

Iceland chairman and chief executive Malcolm Walker said: “This has been an exceptionally challenging year for the group, and for the UK food retailing industry as a whole. In the face of food price deflation, intense competition and significant change in consumers’ shopping habits, Iceland has continued its long tradition of successful reinvention.

“We have done this by developing a new store format, launching new product ranges, upgrading packaging, rethinking marketing and initiating a major productivity programme. The benefits began to become evident in a more encouraging underlying sales and profit performance towards the end of the year, which has put us in a stronger position to face the continuing competitive challenges in the year ahead.”

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