Sainsbury’s CEO reports solid start to year

As Sainsbury's updates the market Graham Spooner, investment research analyst at The Share Centre, explains what it means for investors

Sainsbury’s CEO reports solid start to year

This morning, supermarket Sainsbur6’sy posted a fall in sales, as same store sales fell 0.8% like-for-like. However, investors should appreciate that this was above analysts’ expectations of a 1.7% decline.

The company cited the ongoing pricing war in the sector and continued deflationary pressure on food prices as reasons for the fall.

The group reported like-for-like transaction growth across all channels and believes it is well-positioned to outperform its peers. The group’s CEO Mike Coupe stated that Sainsbury’s had made a solid start to the year even though market conditions remain challenging.

We continue to recommend Sainsbury’s as a ‘buy’ for contrarian investors only, as the company leverages its range of shopping channels, diversifies its products and services and focuses on flexibility and convenience.

This is where it could have advantages over the likes of Aldi and Lidl. Interested investors should appreciate that its balance sheet should put it in a stronger position over peers to defend its market share.

 

Please remember this is the view of The Share Centre only and we do not give advice on shares

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