Sainsbury's braced for dip in sales as analysts fear worst
The UK’s second biggest supermarket, which last year acquired Argos, reported better- than-expected sales over Christmas.
But analysts at Bank of America (BoA) have pencilled in a 0.3 per cent dip in like-for-like sales at Sainsbury’s over the fourth quarter.
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Hide AdBoA’s Xavier Le Mene said: “Overall Sainsbury has been lagging the remaining Big Four peers, and Kantar suggests this will continue in the fourth quarter.”
Sainsbury’s boss Mike Coupe sounded a note of caution in January, as the supermarket faces a continuing sector price war and pressure on costs and shelf prices from the Brexit-hit pound.
The fall in the value of sterling since last year’s vote has seen the cost of imports rocket, with many businesses passing the costs on to consumers.
The net result for supermarkets has been average basket sizes falling.
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Hide AdAccording to figures from Kantar, food inflation doubled last month to 1.4 per cent year on year as the cost of everyday staples such as butter and tea rose.
On Thursday, shares in Morrisons took a dive after the supermarket warned over the potential cost impact from the pound’s collapse.
However, like-for-like sales are tipped to have grown 2 per cent at Argos over the quarter.