Sainsbury, the UK grocer that just acquired the Argos store chain, reported slightly weaker supermarket sales amid a shift toward lower prices on everyday items.

Same-store sales fell 1.1 per cent, excluding fuel, in the 16 weeks to the end of September 24th, the London-based company said in a statement Wednesday.

That compares with analyst estimates for a 1 per cent drop and the previous quarter’s 0.8 per cent decline.

Having completed the €1.4 billion acquisition of Argos this month, investor attention has shifted to whether chief executive Mike Coupe and his team can make a success of a deal that hasn’t won widespread backing.

That job has been made harder by sterling’s drop following the Brexit vote, which will push up Argos’s purchasing costs.

Meanwhile, the UK grocery market remains mired in a price war that’s squeezing profits across the industry.”We expect the market to remain competitive and the effect of the devaluation of sterling remains unclear,” Mr Coupe said in the statement. Same-store sales at Argos rose 2.3 per cent per cent in the quarter, the company said.

Bloomberg