BUZZ-Sainsbury: Q2 sales drop, sees tough market persisting
** Supermarket Sainsbury's shares down 3 pct in volume, bottom of FTSE 100, after Q2 LfL sales fall 1.1 pct excluding fuel
** CEO Mike Coupe says market will remain competitive, but adds co is positioned to outperform peers
** Stock set for worst day in nearly three months, down about 6 pct this year
** Rivals Tesco, Morrison slightly higher on the day
** SBRY second-largest loser on Stoxx and bottom of the Stoxx 600 Retail Index (venkateshasoumithri.mamidipudi.thomsonreuters.com@reuters.net)