THE City expects to see solid trading from Sainsbury’s when it updates investorsthis week.
Sainsbury’s is expected to demonstrate resilient trading when it posts its half-year profits on Wednesday as the supermarket sector continues to face growing pressures.
Analysts at Jefferies expect the grocer to report like-for-like interim sales down 1.6 per cent, an improvement on a 1.8 per cent fall in same store sales over the previous six months.
The supermarket, run by chief executive Mike Coupe, is forecast to post a pre-tax profit down 22 per cent to £293m, with margins weakening as the industry has seen prices fall for more than a year.
The Big Four supermarkets –Tesco, Leeds-based Asda, Bradford-based Morrisons and Sainsbury’s – have been squeezed amid a fierce price war as they fight back against the increasing popularity of discounters such as Aldi and Lidl.
By contrast, last Thursday Morrisons posted like-for-like sales that fell 2.6 per cent, excluding fuel, in its third quarter to November 1, a steeper slide than the 2.4 per cent decline seen in the previous three months.
Morrisons said the slide came as it continued to cut back on promotional vouchers.
At Sainsbury’s, some brokers had feared the supermarket would be in for a tough time, expecting it to bear the brunt of an anticipated revival at Tesco.
Shore Capital analyst Clive Black said: “Mike Coupe’s business remains relatively resilient, particularly to any commercial challenge from a recovering Tesco.”
Tesco chief executive Dave Lewis has embarked on a shake-up of Britain’s biggest supermarket since taking over a year ago following sliding sales under predecessor Philip Clarke.
Mr Lewis has closed failing stores and sold off non-core businesses in bid to boost its key UK operation, and brokers had feared Sainsbury’s more upmarket offering would be the most vulnerable of the major supermarkets to a resurgent Tesco.
But Sainsbury’s was the only one of the major supermarkets to see sales rise by 1.1 per cent to 16.1 per cent market share in the 12 weeks to October 11, according to the latest till roll figures from respected research group Kantar Worldpanel.
Sales were boosted by a strong performance at its online operation and its convenience stores.