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Sainsbury’s chief predicts food deflation will continue for at least another year; could double c-store numbers

| International retailers

Sainsbury’s Chief Executive Mike Coupe has predicted further tough times ahead for the grocery industry with food deflation set to remain a key factor for at least another 12 months.

In an interview with the Mirror newspaper, he said: “Selling groceries at the moment is the hardest I have seen in my 30 years in the industry. There has been no volume growth in the past five years, there has been a lot of change in customer habits, and people have more ways to shop.”

He added that grocery prices are likely to continue falling, telling the newspaper: “That’s great for customers, your readers, because you’re probably spending £3 or £4 a week less, so £200 a year.”

Meanwhile, he predicted that the tough trading conditions may force some of its rivals out of business. “None of us has the right to survive. I am absolutely certain that there will be a different world in 10 years time.

“There might not necessarily be a Big Four, or maybe there will be a different Big Four.”

Coupe also revealed that the retailer could double the number of convenience stores it operates to capitalise on the strong growth in the channel. He said: “We are currently at just over 700 convenience stores and we’re opening roughly one to two a week. At that rate you can easily get to well over 1,000 and, within the realms of possibility, 1,500.”

Whilst Sainsbury’s larger supermarkets are struggling, its convenience division has been one of its success stories. In its recent trading update for the 10 weeks to 14 March, the group revealed that sales growth in its convenience chain remained strong at 14% with it opening 23 new outlets during the quarter.

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