Sainsbury (j) Share Discussion Threads

[loganair] 04/7/2020 08:13

Tesco has reportedly asked suppliers to agree price cuts as it steps up its battle with budget supermarkets.

The move is part of its shift to an "everyday low pricing strategy", which will see it use fewer promotions.

A Tesco spokesperson said: "We are committed to open, fair and transparent partnerships with all of our suppliers."

Tesco has given suppliers a deadline of 10 July to agree, according to the Grocer.

Several suppliers told the trade publication that they faced pressure from the supermarket to lower their prices.

Some raised concerns over the timescale of the demands, as well as a lack of clarity over how the change in promotions would work in practice.

Tesco launched its "Aldi price match" promise in March, where products including fresh and freezer food are matched against those offered at the budget supermarket.

The supermarket announced in June that it has extended the scheme to nearly 500 Tesco and branded products in response to increasing competition.

"We have also reduced the number of short-term promotions, as we focus our investment on everyday low prices instead," it said.

A Tesco spokesperson told BBC News: "We have been speaking to suppliers about how we can work together to continue giving our customers great value.

"We don't believe that our customers should pay more for a brand in Tesco than anywhere else."

They added: "We are committed to open, fair and transparent partnerships with all of our suppliers, and that collaborative approach will continue as we look for new and innovative ways to bring our customers great value."

Neil Shah, director of research at Edison Group, said that investors "should keep a close eye on the company, since the group operates in a crowded market with retailers Aldi and Lidl continuing to gain market share and current results might not be replicated when the UK is lifted from lockdown."

[pierre oreilly] 02/7/2020 15:52

How can sains tesco m&s food compete with lidl aldi on price? It's impossible. The conventional supermarkets have massive costs to pay for out of the gross profit - lidl and aldi have practically nothing at all because they provide nothing extra at all.

Sains and the rest have had a boost over covid - we usually shop anywhere convenient with no brand loyalty at all. Some things are good in sains (their orange top milk for tea, which doesn't seem to be anywhere else), aldi for smoked salmon, fish and cheese (very good quality), m&s for everything except quite expensive, tesco for nothing special really, waitrose bog roll the mrs says. We've kept away from aldi and lidl recently, but will start going back when things settle down.

I expect sains are having a temporary boost, but aldi and lidl will soon start pinching their customers again soon. aldi lidl to expand and sains tescos to contract medium long term. Been like that for a decade now, no sign of stopping, except the current blip.

[unastubbs] 02/7/2020 15:00

anyone looking for a reason for the fall in share price following results which have largely been taken as positive would do well to read this article from the FT



and if you can't be asked to read all of it then just these last paragraphs should be enough to explain...

“No one in their right mind is going to raise guidance at the end of the first quarter given the uncertainties we’re facing,” said Mr Black.

He added that while an economic downturn would usually make shoppers more value-conscious, supermarkets were likely to be planning price cuts over the summer to ensure they remained competitive.

Hard discounters grabbed market share from “complacent” supermarkets after the financial crisis, he said. “But they’re not going to get a second round.”

so it's clear that having got new customers through the door the large multiples are not going to see them disappear back to lidl and aldi without a fight.

[ny boy] 02/7/2020 09:53

Failed to keep above 214p resistance, Investors sold off..back to being dull at or below 200p

Only hope, is the General markets recover post Covid and this stats trading above 214p but doubt much higher than 230p this year.

[tim 3] 02/7/2020 09:13

A lot of posters on these BB's know much more than these so called expert ANALyst's!

[muffinhead] 02/7/2020 09:11

I ordered some clothes online from the "TU" range in April... This would normally come under supermarket general merchandise sales. The men's section of my local Sainsburys was closed off to provide space for grocery packing online orders. The clothes were ordered in, took a few days and I collected the order from the Argos till.

So does Sainsbury's classify my "TU" clothes purchase as an Argos sale?


... from trading statement
Total General Merchandise sales 7.2%
GM (Argos) 10.7%
GM (Sainsbury's Supermarkets) (9.3)%

[spob] 02/7/2020 08:51

Take 2 companies, A and B


Company A

market cap 100m
profits 10m
net liabilities zero

Company B

market cap 100m
profits 10m
net liabilities 400m


(net liabilities = Current Assets minus Total Liabilities)


Are you paying the same price for both companies, if you buy them both for 100m

How can you ignore the liabilities and say wow this company is so cheap !


The price for company A is 10 times earnings
The price for company B is 50 times earnings

[loganair] 02/7/2020 08:50

'feel under-rated to us' - Clive Black is sounding more like an inexperienced private retail investor posting on a BB rather than a professional, experienced and highly paid share analyst.

[spob] 02/7/2020 08:42

When you buy a company, all of the debts and liabilities held by that company become YOUR debts and liabilities

Therefore Mr Clive Black is very naive to suggest that the price for Sainsburys is only 10 times possible future adjusted earnings.

Try again Clive

[loganair] 02/7/2020 08:33

Shore Capital upgrades ‘under-rated’ Sainsbury’s:

Shore Capital has upgraded Sainsbury’s (SBRY) as the supermarket chain feels ‘under-rated’.

Analyst Clive Black upgraded his recommendation from ‘hold’ to ‘buy’ after a ‘major positive surprise’ from Argos trading. The shares fell 2.5% to 203.5p yesterday.

Black said the shares ‘feel under-rated to us’ after better-than-expected trading momentum and the ‘sensible and cautious guidance of management around the full-year potential out-turn, particularly around the UK consumer economy’.

‘While keeping our forecasts intact and our feet on the ground, we believe that Sainsbury’s shares can break out of their 185-210p trading range and operate within a 200-230p band,’ he said.

‘Put another way, we feel 10 times 2021 earnings per share is too low for this defensive stock.’

[mercer95] 02/7/2020 08:05

Spob why don’t you grow your own fruit & veg & just order non perishable online, you’ve posted over 18,000 times on these threads so you must have free time in abundance GLA.

[mercer95] 02/7/2020 07:08

I’ve had numerous deliveries from Sainsbury’s with no issues but some problems are inevitable when you’re dealing with a lot of items, some people are just not realistic with their expectations or they enjoy moaning & complaining constantly.

[spob] 01/7/2020 22:14

yep me too

Tried it once when my car was being repaired

they forgot to send all the fresh items because they are stored separately

never again

[tim 3] 01/7/2020 18:43

A strong online is essential but just how profitable is it when all the costs are added I suspect not very.

[tiredoldbroker] 01/7/2020 17:25

I agree that a strong online offering is essential. But does Sainsbury's have one? Argos seems to be creaking, if you look at the Twitter comments on @ArgosHelpers and @Argos_Online there are a lot of very unhappy punters.

[loganair] 01/7/2020 15:49

There is no dividend, remember. This was suspended in April, even though rival Tesco has stood by its payout. Interestingly, recent Sainsbury’s share price performance has been marginally better. It is up 7.5% in the last month while Tesco is down 2%. I suspect investors are indulging in a bit of profit-taking today, because these are good results.

The dividend will return at some point. Right now, analysts are forecasting a yield of 4.8% in 2021, and 5.1% in 2022. That is the main reason to buy into the Sainsbury’s share price – for income. Share price growth has been non-existent for years.

[loganair] 01/7/2020 15:46

Sainsbury’s wins shoppers from the discounters as it focuses on value:


With lockdown restrictions easing, Sainsbury’s has been slowly opening its Argos stores and there are signs grocery shopping is returning to pre-Covid patterns, with people shopping more regularly and smaller basket sizes – although both are still well above levels seen in March.

The shift to online shopping is expected to stick too. Some 17% of Sainsbury’s sales are now through online, compared to 7% pre-Covid, with much of this increase coming from click-and-collect. And Sainsbury’s says so far there is no sign of this dropping back down.

Shoppers are also indicating they plan to buy more fresh ingredients and cook at home more regularly, although there is expected to be some drop back as restaurants and pubs reopen.

All of this plays into the hands of the so-called ‘big four’ grocers. Sainsbury’s is not the only major supermarket to win over shoppers from the discounters, with Tesco claiming it has experienced a net gain from Aldi in the past few months for the first time in a decade.

Nevertheless, Roberts expects safety to continue to be important to shoppers and an area of differentiation for those seen to be taking the lead.

[loganair] 01/7/2020 15:00

Analysis by Luke Tugby - The figures underscored the fact that Sainsbury’s has emerged as one of the UK’s biggest winners from the health emergency – Roberts was keen to point out that the business has won customers from Aldi, Lidl and its big-four rivals during the lockdown.

But attention is already turning to the future and how Roberts might shape Sainsbury’s strategy in order to maintain such momentum once the coronavirus crisis subsides.

[spob] 01/7/2020 14:40

I think a second lockdown is inevitable here later in the year

Just looking at Airport arrivals/departures

flights now coming in from all over the world, on a daily basis

even from places like brazil, where the virus is out of control

[loganair] 01/7/2020 14:33

What the experts say:

Michael Schirrmacher, UK Managing Director at Bloomreach, believes that Sainsbury’s should be a lesson to all retailers that the key to winning in the current environment is having a good digital offering.

“As more and more consumers migrate online to purchase anything from food and clothes to medicine and even children’s toys, businesses are fast realising that they can no longer afford to have a weak online presence: today, shoppers are more likely to connect with a brand online first before making their way to a high street branch,” he says.

According to Bloomreach’s State of Commerce Experience report, 90% of customers have changed their behaviour as they avoid physical stores, putting discretionary spending on hold and buying exclusively online or as much as possible. Half of customers even said that they are shopping on digital channels for products they’ve never bought online before.

And this is having a huge impact on investment: in the same report, the company found that investment in brick and mortar stores has dropped by almost 30% since the start of the lockdown (from 52% to 24%).

“This shows that businesses understand the urgent need to enhance the digital experience they are offering customers who all think digital first,” says Schirrmacher. “Shoppers are more unforgiving than ever before when it comes to a bad digital experience, and brands simply can’t afford to lose customers to their competition because a product was hard to find, or it took too long to load a page. Whether your business is in survival, adaptive, or growth mode, now is a critical time to reallocate funding to deliver enhanced digital experiences and set your business up to be more competitive as the world shifts to a new normal post-pandemic.”;


Neil Shah, Director of Research, Edison Group, sounds a note of caution. “Despite strengthening sales, increase in costs related to reacting to the crisis will clearly weigh in or earnings this year as the company expects flat underlying pre-tax profit for the 2020-21 year.”

He adds: “All of the UK’s major supermarket groups have seen grocery sales boosted during the lockdown, and both Sainsbury and Tesco have been clear winners of the back of their vast network of superstores supported by an increase of online demand and local convenience stores.”

Shah concludes: “However, investors should keep a close eye on Sainsbury and be slightly cautious around the company´s growth over the past months. With lockdown easing and normality returning, it will be interesting to see how the company, who has been losing market share for the past few years, manages to keep up with their positive sales and growth."


Joe Healey, Investment Research Analyst at The Share Centre adds: “This is a strong update from Sainsbury which has performed better than expected as it continues to invest in lower prices alongside improving its stores.”

Healey continues: “The group has also showcased its flexibility to manage the increase in capacity from the pandemic effectively. Nearly 50% of new online groceries are from new customers with the supermarket now taking over 650,000 orders a week compared to just 370,000 pre-crisis. The flexibility to double capacity speaks volumes of the technology and digital platforms Sainsbury operate and will be something investors will be very pleased with moving into the future.”

He concludes: “However, it’s important for investors to remember these results were always going to be higher thanks to the combination of consumers purchasing bigger baskets and good weather. Whether this theme will continue is unlikely. It is prudent to see management are not expecting this sales growth to continue considering the uncertainty we still have surrounding consumer spending and something which investors should bear in mind.”

[spob] 01/7/2020 14:23

hampsters pushing trolleys and driving vans but going nowhere

meaning - no profit

LOL

[spob] 01/7/2020 14:20

How many hampsters does Sainsburys employ in their online operation now ?

The wage bill must be astronomic