Sainsbury rocked by summer of woe

Boss accused of taking eye off the ball ahead of Asda deal

SAINSBURY’S boss Mike Coupe has been accused of taking his eye off the ball as the supermarket continues to lag behind its competitors amid a planned £14bn merger with Asda.

With the two grocery chains preparing to join forces, analysts warned the latest industry sales figures weakened the argument for the deal rather than strengthening it.

According to the Kantar Worldpanel data, Sainsbury’s was the worst performing of the major supermarkets in the 12 weeks to August 12, lagging behind Big Four rivals Tesco, Morrisons and Asda as well as Aldi, Lidl, Co-op, Waitrose and Iceland.

Clive Black, head of research at broker Shore Capital, said: ‘The figures undoubtedly underscore our view that the merger between Sainsbury’s and Asda is one of weakness and not of strength.’

Black added that Coupe, 57, may have taken his eye off the ball, focusing on the tie-up with Asda rather than sales at the supermarket. The deal is currently being scrutinised by the Competition and Markets Authority, a process which could take more than a year. If it gets the green light, the merged group will become the UK’s biggest supermarket with annual sales of £51bn.

Blac said: ‘If Coupe is distracted then he’s been distracted for a while because Sainsbury’s has been underperforming against the rest of the industry for quite a few quarters now.’

Total grocery sales across the industry over the three months to August 12 were 3.5pc higher than they were a year earlier – an increase of £906m – as the hot weather boosted demand.

But sales at Sainsbury’s were up just 1.2pc, while Tesco gained 1.8pc, Asda 2.6pc and Morrisons 2.7pc. Lidl and Aldi continued to lead the pack on sales growth at 8.6pc and 12.6pc respectively, with Ocado just behind at 8.5pc.

But Co-op stood out among the crowd to post its fastest rate of growth in almost seven years, up by 7.8pc. Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said Co-op had benefited from its convenience store model which typically performs better during warmer weather.

He said: ‘Consumers’ current preference to shop locally when the sun is shining has helped Coop attract an additional 263,000 new shoppers through its doors.’

Analysts said Co-op’s performance served as an example to Sainsbury’s, which declined to comment last night.