Sainsbury’s saw its share price fall by 1.1% to 222.8p today after it reported a fall in Christmas sales, confirming that Britain’s second-largest supermarket group has fallen behind rivals as it battles to acquire smaller rival Asda.

Blaming the “cautious customer spending”, the group said while grocery sales were solid in the third quarter it suffered from poor demand for general merchandise.

Sainsbury’s like-for-like sales, excluding fuel, fell 1.1 percent in the 15 weeks to Jan. 5. Second quarter sales had risen 1.0 percent.

Mike Coupe, chief executive of Sainsbury’s, said: “Sales declined in the quarter due to cautious customer spending and our decision to reduce promotional activity across Black Friday. Clothing performed well, with strong full price sales growth in a tough market.

“Retail markets are highly competitive and very promotional and the consumer outlook continues to be uncertain.”

The figures come just days after UK’s fourth largest retail chain Morrisons reported a 0.6 per cent rise in retail like-for-like sales for the nine weeks to Jan. 6. The country’s biggest supermarket Tesco will reveal its trading over the crucial festive period on Thursday.

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