Sainsbury (j) Share Discussion Threads

[poikka] 23/7/2019 11:42

From Alliance News

(Alliance News) - UK supermarket sales have declined so far this summer, Kantar reported Tuesday, though this was expected due to the hot weather during 2018.

Kantar data showed all of the "Big Four" grocers, Tesco PLC, J Sainsbury PLC, Wm Morrison Supermarkets PLC, and Asda lost market share in the 12 weeks to July 14.

Sales in the period declined 0.5%, to GBP27.18 billion, with this the first overall decline in the sector since June 2016.

"However, on the back of record sales during last year's hot summer, the tough period was not unexpected. As in politics, nothing is certain in retail, but it is anticipated the market will return to growth once the comparative highs of the 2018 summer pass," said Kantar.

Tesco's sales declined 2.0% in the period to GBP7.49 billion, with market share slipping to 27.2% from 27.6%. Sainsbury's sales fell 2.3% to GBP4.24 billion, and market share reduced to 15.3% from 15.5%.

Morrisons sales fell 2.6% to GBP2.85 billion, with market share declining to 10.3% from 10.5%. Walmart Inc's Asda sales were down 2.0% to GBP4.11 billion, and market share dipped to 14.9% from 15.1%.

Ocado Group PLC's sales rose 12%, the strongest of all grocers included in the survey, with market share rising to 1.4% to 1.2%.

The two major discounters, however, Aldi and Lidl registered strong periods. Aldi sales climbed 6.7% to GBP2.04 billion, and market share was up to 8.1% from 7.5%.

Lidl's sales increased 7.0% to GBP1.48 billion, with market share rising to 5.8% from 5.4%.

"It was a challenging 12 weeks for all the major grocers, with growth slowing at every supermarket except Ocado. The main factor behind the sales drop-off is shoppers heading out to stores less often," said Fraser McKevitt, head of retail & consumer insight at Kantar.

"Last year people shopped more frequently and closer to home as they topped up the cupboards while enjoying the sunshine and the men's football World Cup. This year households are making one fewer trip, which may not sound like much but is enough to tip the market into decline," he continued.

"In addition, like-for-like grocery inflation fell marginally to 0.9%, which is good news for consumers but has made it harder for retailers to achieve value growth."

Some GBP75 million less was spent on alcohol, Kantar continued, with beer sales down 11% and cider down 13%. However, chocolate did grow 15%, due to the cooler weather.

Tesco shares were 2.3% lower on Tuesday at 229.80 pence each, Sainsbury's down 1.4% to 204.00p, Morrison's down 0.5% at 204.70p, and Ocado down 0.6% at 1,212.50p.

In Johannesburg, Brait SE was untraded early on, last quoted at ZAR16.40 a share. It owns 63% of frozen food retailer Iceland.

Iceland's sales fell 1.5% to GBP582 million for the 12-week period to July 14, with market share flat at 2.1%.

[loganair] 23/7/2019 10:20

By Robert Stephens Equity Analyst - Following news that the merger between Asda and J Sainsbury was not going to be allowed on competition grounds, the share price of the latter has fallen significantly.

In fact, in the last year the company’s shares are down by 36%. This has pushed them to their lowest level in over 25 years.

In the short run, it wouldn’t surprise me if the company and peers such as Tesco and WM Morrison Supermarkets see their share prices come under a degree of pressure. Consumer confidence in the UK is weak at the moment, and this may make shoppers more price conscious than they otherwise would be.

However, with wage growth being ahead of inflation, I remain relatively optimistic about the long-term prospects for the wider retail industry. Therefore, I believe that Sainsbury’s P/E ratio of around 9.5 suggests that it could offer good value for money at this moment in time.

It’s a lower rating than Tesco’s 14 and Morrisons’ P/E ratio of 14.5. However, it should be pointed out that both of those companies have stronger EPS forecasts than Sainsbury’s for the current year, with them being 20% and 10% respectively versus a figure of just 4% for Sainsbury’s.

As a result, I think all three supermarkets have long-term investment appeal. Although they may experience challenges as the retail sector transitions towards an increasingly online focus, which may suit sector peer Ocado Group to a greater extent, I’m of the view that they have sound strategies through which to generate improving sales.

Further, Sainsbury’s remains highly profitable. Ocado may be able to deliver higher sales growth, and could post stronger capital gains in the near term, but its lack of profitability remains a risk in my eyes.

Sure, I’m optimistic about the online-focused company. But, equally, I think that the Sainsbury’s share price could offer investment appeal due to what I view as a low valuation and a strategy that focuses on differentiation and customer loyalty.

While further volatility may be ahead for the retail sector, I wouldn’t be surprised if there is capital growth potential on offer over an extended time period.

[loganair] 23/7/2019 09:47

Aldi/Lidl are opening up around 40 supermarkets per month.

[loganair] 23/7/2019 09:43

It seems to me just another 6 to 9 months and Aldi/Lidl will have around the same market share as Asda and with in a little over a year will over take Sainsburys.

[loganair] 23/7/2019 09:35

Not me with my Goldies.

[buywell3] 23/7/2019 09:34

FTSE 100 will soon be sinking into the sunset I believe

Supermarkets and Retailers

Building and Construction

Banking,Insurance and Finance

Aircraft and Travel

Overdebted old Telco's

ALL IMO are going to feel pain

dyor

[loganair] 23/7/2019 09:30

The latest Kantar figures show that Aldi/Lidl have increased their market share by 0.3% over the past month to give them a combined market share of 13.9%.

[imperial3] 22/7/2019 09:09

Out and out pessimists.

[s34icknote] 22/7/2019 08:44

Who called 150 ??Looks like 220p ten times earnings on the cards .Sicknote

[loganair] 19/7/2019 14:46

For Sainsburys to survive it either needs scale or margins.

It tried for scale with merging with Asda...failed.

This leaves Sainsburys needing to increase their margins which is the lowest out of the big 4 supermarkets, actually sadly Sainsburys have the lowest margins out of the biggest 10 supermarket groups.

[poikka] 19/7/2019 11:27

Buywell - "The scale of the problem for SBRY",

or the scale of the opportunity for investors.

[tim 3] 18/7/2019 21:08

Great idea and they do a great range of low alcohol beers at their supermarkets availability is sporadic though.

[loganair] 17/7/2019 11:33

Nothing to do with Lidl...it is Aldi Nord and Aldi Sud which have been run as separate companies for a long time in the same way West and East Germany were until reunification.

[muffinhead] 17/7/2019 11:22

edit.. senior moment!

[loganair] 17/7/2019 11:06

If Aldi Nord and Sud do reunify, like East and West Germany did would bring about a supermarket power house of over 12,000 stores and yet the CMA would not allow Sainsburys to merge with Asda.

[loganair] 17/7/2019 10:57

Not good news for the big 4 UK supermarkets:


Aldi Nord and Süd make a big reunification - Aldi Nord and Aldi Süd are making an important step in their reconciliation: the Albrecht brothers’ discount stores are harmonizing their offer. By 2020, existing home brands will be systematically merged.

By 2020, standardization should be finalized. The aim of this operation is to reduce costs and generate economies of scale through joint purchasing: for some categories of products Aldi Nord will buy for both brands from ‘its’ private label supplier, while for other products it is Aldi Süd who will make the purchases at the group level.

By the end of 2020 at the latest, the two discounters will also propose their weekly promotions and non-food offer in common.

[loganair] 17/7/2019 10:30

Story of a poorly managed company.

Wasting precious management time on take overs instead of using this time to running the core basic Sainsburys well.

Lets sell rubbish insurance at the check out....I say what about the core basics of selling groceries and do that well.

[muffinhead] 17/7/2019 08:30

Story of the evolution of UK middle class finances

[buywell3] 16/7/2019 21:32

The scale of the problem for SBRY

[buywell2] 16/7/2019 12:02

Anyone tried those SBRY barbecue crunchy crickets ?

High protein levels too

[imperial3] 16/7/2019 11:48

The 150p prediction by some posters is way out of line,and all the bad news now, is factored into current prices inmho.