Troubled supermarket J Sainsbury has reported a 0.2% fall in like-for-like sales for the January to March period compared with last year. Sainsbury's, which is losing market share to its competitors, warned investors its 2004 profits would fall short of last year's.
Its shares dropped 7% in response.
Analysts had expected a sales rise, though only because last winter had been disappointing. Sainsbury's total sales rose 0.8% during the quarter.
Sainsbury's bottom line is under pressure from tough competition, the company said.
"There was a significant increase in price competition as the food retail market place reacted in anticipation of Morrison's acquisition of Safeway," it said.
New leader
The like-for-like figures mark the end of chief executive Sir Peter Davis's reign.
"It's been a tough year for Sainsbury's," said Sir Peter.
"When our modernisation programme is behind us we will be in a position to invest more in price and quality in order to drive sales growth."
Former Marks and Spencer executive Justin King will become chief executive.
His task will be to bolster the company's UK business.
Some of the proceeds from a $2.5bn (�1.4bn) sale of its US supermarket business Shaw's should go towards this push, the company said.
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