New figures have shown that ailing supermarket chain Iceland has yet to reverse a steep slide in sales.

Iceland owner the Big Food Group said the supermarket's underlying sales during the 13 weeks to late September were down by 7.7% compared with the same period last year.

Overall sales at the Big Food Group - which also includes the Booker chain of cash and carry stores and the Woodward food services business - were down by 1.5%.

"Iceland continues to experience weakness in its sales performance," the north Wales-based group said.

The latest figures mark a further setback for the retailer, which has been struggling to reverse a steep decline in sales for nearly two years.

Retail challenge

Iceland, which sells mainly frozen foods, grew rapidly during the late 1990s, but began to lose ground in late 2000 after making an ill-fated switch to organic products.

Efforts to lure shoppers back into the aisles have focused on price cuts and buy-one-get-one-free offers, but the company continues to lose market share to larger rivals Tesco, Sainsbury and Asda.

However, Big Food Group said on Wednesday that profit margins at Iceland were up, and added that a refurbishment programme at some of its stores had yielded good results.

"Our refurbished stores continue to impress and demonstrate that this strategic initiative will deliver a step change in performance," the company said in a statement.

Big Food Group shares were a penny lower at 26p in late afternoon trade on the London Stock Exchange.

The company's stock has lost over 80% of its value since the beginning of the year.