Sainsbury’s like-for-like slump is a symptom of endemic problems in the wider grocery sector.

A shuddering halt to nine years of like-for-like growth at Sainsbury’s is the latest indication that the grocery sector is facing turmoil.

The 3.1% like-for-like fall in Sainsbury’s fourth quarter is a particularly heavy blow even within the context of last year’s strong trading, and adds considerable weight to the argument that structural changes in the market have reached a tipping point. This signals the dawn of a troubled period for the sector.

“The big four have found themselves at the centre of a perfect storm”

Chris Brook-Carter

The big four grocers have found themselves at the centre of a perfect storm. The challenges of repositioning giant organisations to mitigate against the social and cultural shifts that are shaking the industry - from the growth of online to the move to convenience - have been exacerbated by post-recessionary consumer attitudes to price.

Such behaviour, which became ingrained in the downturn and shows no signs of abating as the economy improves, opened the door to share gains in an otherwise declining market by the discounters Aldi and Lidl, an opportunity the German operators have exploited with aplomb.

The speed with which the online and convenience sectors are growing demands that the structural reinvention of the grocers accelerates. But much has also been made in the past 12 months of the need to differentiate in this highly competitive market.

Yet for all the work being done by Tesco to create its vision of a digital retail leader, or Sainsbury’s focus on quality and provenance, there are few signs these efforts are so far creating lasting points of difference with consumers or new paths to loyalty.

Morrisons’ own reaction last week was to pledge £1bn in price cuts over the next three years, which follows Tesco’s £200m investments announced in February.

The other grocers will surely follow, whether with cuts of their own or passively though price match schemes.

Departing Sainsbury’s boss Justin King has been quick to argue that these pledges to invest in price amount to little more than sabre rattling, describing them as “part of the normal cut and thrust of the marketplace”.

But it’s an environment that has led one senior retail analyst to refer to the food retail sector as “almost uninvestable” - a reflection of the uncertainty that now surrounds the medium-term prospects for the big four and the dangers a price war would pose to all in their efforts to create genuine value in the future.