Sainsbury's hit by falling sales and profits

Sainsbury's has reported a fall in sales in the first half of the financial year amid increased competition with other supermarket chains.

Like-for-like sales – excluding fuel – fell 1% year-on-year in the six months to 24 September period.

Underlying profit before tax came in at £277m ($346m), a 10.1% decline from the same period a year ago.

In a statement, Sainsbury's said it expected profit in the second half of the year to be lower than the first "as a result of continued price investment and a step up in cost inflation".

Argos would deliver an underlying profit contribution of between £55m and £75m in the second half, it added.

"Two years ago we set out our strategy to make our customers' lives easier, offering great quality and service at fair prices, serving our customers whenever and wherever they want. We have made good progress delivering this in challenging market conditions," Sainsbury's chief executive Mike Coupe said.

Underlying group sales increased 2.1% to £13.9bn in the first half of the year.

Shares in Sainsbury's fell 4.4% during early trading in London.