Sainsbury's reports 0.8% fall in sales amid 'challenging' trading

Sainsbury's has posted a fall in sales as it remains under pressure amid a supermarket price war and cautioned over "challenging" trading.

Britain's second biggest supermarket reported a 0.8% drop in like-for-like sales excluding fuel for the 12 weeks to June 4.

The fall marks a setback after a return to quarterly like-for-like growth for the first time in more than two years the previous three months, when sales edged 0.1% higher.

Mike Coupe, chief executive of Sanisbury's, said: "Market conditions remain challenging.

"Food price deflation continues to impact our sales and pressures on pricing mean the market will remain competitive for the foreseeable future."

Sainsbury's recently began scrapping multi-buy promotions and has ditched its brand-match guarantee in favour of overall lower prices.

The first quarter update comes as the group's £1.4 billion takeover of Argos owner Home Retail Group faces scrutiny from the competition watchdog.

The Competition and Markets Authority (CMA) said last month it was looking into whether the tie-up with Argos owner Home Retail could result in a "substantial lessening of competition".

It will consider comments on the deal and decide whether to launch an inquiry by July 25.