Sainsbury (j) Share Discussion Threads

[sponges] 21/1/2020 15:56

apparently hundreds of management roles being axed to mirror Argos

[alphorn] 18/1/2020 17:12

………;……and Swissair went bust. ;)

[loganair] 18/1/2020 14:13

For me shopping at Waitrose has nothing to do with feeling socially superior, it has to do with Waitrose being a far more pleasant and comfortable place to shop with their colour scheme being far more pleasant and relaxing then the bold in your face colours of Sainsbury, Tesco or Asda.

I also like how Waitrose trust their customers, at their self-service no weighing each item as one puts in in ones bag so I'm able to put through to of the same item before putting in my bag etc.

Overall Waitrose is a far more comfortable shopping experience then Asda, Tesco or Sainsbury's rather like flying Swissair or KLM is far more a comfortable experience then flying Ryanair which I would have to be dead to do so.

[careful] 18/1/2020 10:41

Seems like a good business plan.
Train your staff to know the latest cricket scores, give them elocution lessons, then double the price of baked beans.

It reminds me a Basil Fawlty wanting a better class of customer at Fawlty Towers.
He grovelled around Lord Melchett, who was a con man.

Life imitates art, Waitrose customers feel socially superior and are proud to carry their bags around as a mark of their social position.
A sort of class system.

We shop at Tesco and of must be of lower caste... untouchables.

[chiefbrody] 18/1/2020 10:03

lol at 70-3. We'll it certainly happens often enough so they should know!

[loganair] 18/1/2020 09:29

Waitrose is a far more pleasant and comfortable place to shop often with far more intelligent staff and their colour scheme is far more pleasant and relaxing then the bold colours of Sainsbury, Tesco or Asda.

At my local Waitrose all the part time staff come from the local 6th form college and they understand what the significance is when England are 70 for 3.

As for my local Adli, the food there looks sweet and sickly.

[careful] 18/1/2020 09:03

Never underestimate the power of the UK class system.
Waitrose is upper class, food for ladies and gentlemen of quality and breeding.
The other supermarkets are for working class plebs, peasants.
And could you imagine the shame of being caught shopping at Aldi or Lidl?

People will pay more to mix with a better class of person.

[poikka] 18/1/2020 09:00

Hopefully will bring in more shoppers at a time of updated stores.

[tim 3] 18/1/2020 08:23

Nice bit of publicity and does not surprise me about Waitrose 10% more for exactly the same product. Overrated imo.

[poikka] 18/1/2020 00:09

"Sainsbury's has beaten rivals Morrisons and Asda to be named the cheapest supermarket of 2019, according to a survey by Which?.

Throughout the year, the consumer group tracked the prices of 53 branded items on a typical shopping list.

The list included goods like Andrex toilet roll and Weetabix cereal.

Each month Which? went to supermarket websites to compare the cost of the basket, which carried an average price tag of £107.01 at Sainsbury's.

That stood in contrast to the average monthly cost of buying the goods at Waitrose - the most expensive supermarket according to the survey - where the price came to £117.81, 10% more.

Sainsbury's, which was only the third-cheapest supermarket in 2018, stole the title from Morrisons, where the basket would have cost £109.13 last year.

This year, Morrisons was relegated to third place, behind Asda, where the basket of branded goods carried an average price tag of £107.65.

At Tesco, Which? recorded a £112.40 average bill when it reached the checkout. Meanwhile, the receipt was for £116.40 at Ocado."

[rolo7] 15/1/2020 22:43

Big volume today!

[tim 3] 10/1/2020 22:42

Anyone watch the documentary on the BBC recently?

I just got the impression that everything is a bit too casual and laid back with no real sense of urgency particularly at the head office.Managers appeared more concerned with keeping everyone happy than anything else.

The Christmas add campaign episode the two girls just appeared to be left to get on with it with hardly any input from the board.

Could this be one of the issues at Sainsburys when you compare it to Tesco who are making major changes and appear to be focused and getting the results to match.

I know its obviously partially scripted but have worked in retail environments including head offices and sainsburys was clearly a lot more relaxed than I am used to seeing which is fine is everything is working but clearly it is not.

Was less than impressed with Coupe as well he may be good at numbers but did not inspire confidence that he has a clear vision where they are going.

[loganair] 10/1/2020 09:45

Like with many companies in a similar situation to Sainsbury's, Sainsbury's cost savings can not be a long term solution to trying to protect their profits.

[loganair] 09/1/2020 20:05

3 reasons why I’d buy Tesco shares and sell Sainsbury’s:


The Tesco (LSE: TSCO) share price rose modestly this morning, after the UK’s biggest supermarket reported “strong” Christmas trading despite “a subdued UK market”.

In fact, Tesco’s UK sales were flat over the holiday period, but even so, investors were pleased.

In contrast, J Sainsbury (LSE: SBRY) reported rising sales over Christmas on Wednesday, but the smaller supermarket’s share price fell.

Tesco shares have risen by over 15% over the last year. Over the same period, Sainsbury’s have fallen more than 15%. Here’s why I think the market is right to be bullish about Tesco and worried about Sainsbury’s.

1. What’s the point of this business?

Sainsbury’s shares currently trade at a 36% discount to their net asset value of 357p per share. This is unusual for a profitable retailer. Tesco stock, for example, trades at a 76% premium to its net asset value of 143p per share.

Sainsbury’s valuation means that its shares trade below the breakup value that might be achieved if its property portfolio and banking business were sold. I can only see one reason for this, which is that the group’s trading business is not currently profitable enough to justify its existence.

Looking back over the last year, Sainsbury’s reported an operating margin of 1.9% and a return on capital employed of 3.3%. I don’t think that’s enough of a return to justify the money tied up in the group’s operations.

In contrast, the equivalent figures for Tesco were 4.0% and 6.4%. Those are much more appealing numbers, in my view.

2. Why are Sainsbury’s margins so low?

In my view, Sainsbury’s has two main problems.

One is that the group has tried to maintain its upmarket reputation while cutting prices to be more competitive. Competing with Tesco is tough, given the larger firm’s economies of scale.

I believe that the second problem is Argos. I was bullish on this acquisition at the time. But I’ve since changed my mind. Argos has to compete against larger retailers such as Amazon and Dixons Carphone on high-value sales. Profits margins are very slim indeed – lower than for groceries, according to my sums. The end result is a business that turns over lots of cash, but appears to make very little money.

In contrast, when Tesco went looking for new growth opportunities a few years ago, it decided to expand into wholesale. The acquisition of Booker provided growth and higher-margin sales. It was a very smart deal, in my view.

3. The growth problem:

Talk of growth leads me to the final reason why I’d buy Tesco instead of Sainsbury’s.

In 2014, Sainsbury’s reported an after-tax profit of £716m. Last year, that figure was £186m. The group has not yet figured out a way to return to growth.

Tesco has had problems, too. But in 2014 it reported a net profit of £970m. By last year, that figure had recovered to reach £1,320m.

The outlook for the year ahead mirrors this pattern. City analysts expect Sainsbury’s to deliver earnings growth of about 2% in 2020/21. Forecasts for Tesco suggest that its earnings will rise by about 8% over the same period.

For me, it’s an easy choice. Sainsbury’s 4.6% dividend yield may be tempting, but I think the business has problems that will be tough to solve. I’d feel much more confident buying Tesco for my portfolio.

[loganair] 08/1/2020 08:46

Sainsbury’s performance in the period has turned out to be slightly better than its competitor, WM Morrison Supermarkets PLC (LON:MRW), which yesterday reported a 1.7% decline in LFL sales for the 22 weeks ending 5 January.

However, both Sainsbury’s and Morrisons have failed to provide specific figures for trading over the Christmas period, which has raised questions from some commentators around the true nature of their performance in the festive season.

[tim 3] 08/1/2020 08:07

Does not look too bad on the face of it.

[skinny] 08/1/2020 07:12

.

Strong grocery performance and online growth as we create one multi brand, multi-channel business

· Grocery sales grew 0.4 per cent, with Groceries Online up 7.3 per cent

· Clothing sales grew by 4.4 per cent

· General Merchandise sales declined by 3.9 per cent

· Total online sales grew by 5 per cent

· Total retail sales declined by 0.7 per cent (excl. fuel), with like-for-like sales down 0.7 per cent (excl. fuel)

more.....

[loganair] 06/1/2020 16:19

3 FTSE 100 dividend stocks I’d buy for a passive income today by Rupert Hargreaves:

J Sainsbury:

Shares in J Sainsbury (LSE: SBRY) also appear to have been held back by investor uncertainty recently. Political uncertainty has hurt consumer spending, which has weighed on the share prices of consumer-focused stocks.

Alongside this, Sainsbury’s is also facing disruption in its sector. The rise of the German discounters Aldi and Lidl, have nibbled away at the company’s market share and earnings have taken a hit.

Nevertheless, growth should return this year. Analysts have pencilled in a net profit of £462m for 2020, up from £186m for 2019. As such, this could be an excellent opportunity for long-term investors who are willing to look past Sainsbury’s near-term troubles.

The stock supports a dividend yield of 4.6%, which is covered 1.9 times by earnings per share. It is also dealing at a forward P/E of 11.7, suggesting a margin of safety at current levels.

[loganair] 06/1/2020 15:14

The last Kantar update in early December gave Aldi/Lidl a combined market share of 14.1% which was up from 12.7% a year earlier.

This means during 2019 Aldi/Lidl increased their market share by 1.4%.

[topvest] 29/12/2019 11:07

Nice company Sainsbury and good for customers. However, their finances are pretty awful. Return on capital is very low and reducing on a 5 or 10 year view. Investing more for less. Not a great company to invest in. A good company to shop in though!

[poikka] 29/12/2019 09:15

Popped into Sainsbury's just before Christmas at about 13.30, and they seemed to be coping well with a goodish number of customers. Said to the check-out lady that it was quieter than I expected. She said that it had just quietened-down and that it was "hideous" up to 13.00.

"Hideous", lovely :)

[loganair] 27/12/2019 11:15

Upmarket brands:

2020 could see a significant increase in the number of so called ‘fancy’ brands. Own brands continue to be core to fast moving consumer goods in terms of differentiation, and therefore footfall, as well as providing maximum margin. However, as Aldi and Lidl continue to resonate with customers with their broad range of own brands, mainstream retailers will continue to explore the use of premium brands, own brands that don’t necessarily name the retailer but continue to provide differentiation and margins.

Sainsbury’s is one retailer investing heavily in its ‘Taste the Difference’ range. A rebrand of its range, including recipes, packaging and introducing new lines began in 2019 and this is expected to continue into 2020. Expect this theme to continue across the major grocery retailers.

[imperial3] 23/12/2019 13:47

Still creeping up.

[loganair] 23/12/2019 12:46

Value trap? by Paul Summers

Also providing an update on trading next month (8 January) is the UK’s second-biggest supermarket J Sainsbury (LSE: SBRY).

Times have been tough for the business following its failed merger with Asda at the hands of the Competition and Markets Authority back in April. Indeed, in a year when the FTSE 100 has put in a great performance despite Brexit headwinds, Sainsbury’s stock is down 10%.

Contrarians and value investors will be running the rule no doubt and it’s quite possible that the share price could jump if CEO Michael Coupe announces that trading has been even marginally better than expected.

On 12 times earnings for FY20, however, I don’t think the current valuation is worth getting excited about. The 4.6% dividend yield is undoubtedly attractive and covered 1.9 times by expected earnings, but this can be achieved elsewhere at less risk, in my opinion.