Sainsbury’s set to reveal sales growth despite wet weather
The retailer is set to update shareholders on its performance over the quarter to the end of May, with figures due to be revealed on July 2.
Investors and analysts are hoping the company will shed light on consumer sentiment over the spring and summer.
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Hide AdThe company is predicted to report a 4.7 per cent increase in grocery sales – 5.5 per cent on a like-for-like basis – according to analysts from HSBC. It would represent a slight slowdown on the final quarter of the previous financial period, when total grocery sales grew 7.3 per cent. However, this is predominantly linked to the significant easing of food and drink inflation. In April, Sainsbury’s said it saw volume growth pick up as shoppers saw the price of more products drop or at least stabilise. It will be keen to report further improvements in volume growth, after winning customers from some of its main competitors last year to increase its share of the UK grocery market. Analysts have said they expect sales momentum to have continued in the latest update, despite damp weather in the April and May impacting consumers.


HSBC’s head of European consumer research, Paul Rossington, said: “We expect another strong quarter of core grocery growth despite slow start to spring and summer season.”
In its previous update in April, the supermarket chain also highlighted some weakness in general merchandise, including its Argos arm which has been closing stores over the past year.
Shareholders will be hopeful that easing inflation in some areas will help support demand for big ticket items in general merchandise, such as home technology and furnishings.
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Hide AdLast month, Sainsbury’s revealed it had struck a deal to sell the bulk of its banking business to NatWest in a move that will see the lending giant take on around another million customer accounts.
The deal will see NatWest acquire £1.4bn of unsecured personal loans, £1.1bn of credit card balances and about £2.6bn of customer deposits.
It comes after Sainsbury’s announced in January it was winding down its banking division to focus on its retail business.
The deal is expected to go through in March next year and Sainsbury’s will pay NatWest £125m when it is completed to take on its core banking assets and liabilities, although the final consideration will be confirmed on completion. Analysts have appeared positive about the move, and broader efforts by the company to focus more on its core Sainsbury’s store and online businesses.
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Hide AdShore Capital’s Clive Black said he saw the “announcement as another important stepping stone in the simplification of the Sainsbury business and whilst not a surprise, we welcome this development.
“Meanwhile, Sainsbury’s is starting the expansion of its Grocery footprint within its retail estate whilst progressing its strong food assortment, which is now well and truly lapping market share gains.”
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