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SBRY Sainsbury (j) Plc

-0.60 (-0.22%)
23 Jul 2024 - Closed
Delayed by 15 minutes
Sainsbury (j) Investors - SBRY

Sainsbury (j) Investors - SBRY

Share Name Share Symbol Market Stock Type
Sainsbury (j) Plc SBRY London Ordinary Share
  Price Change Price Change % Share Price Last Trade
-0.60 -0.22% 272.80 16:35:18
Open Price Low Price High Price Close Price Previous Close
274.60 272.20 274.60 272.80 273.40
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Posted at 10/7/2024 08:45 by loganair
Traditional supermarkets battle Lidl and Aldi for market share by KATIE WILLIAMS:

If you look at the share price history of the listed UK supermarkets, you will see that none of them have ever recovered their pre-2008 valuations. A big reason for that is the growth in popularity of Lidl and Aldi.

The German discounters first arrived in the UK in the 1990s, but have grown enormously in popularity over the past decade and a half. They now have a combined market share of 18.1%, according to data from Kantar World Panel.

This has hit Morrisons and Asda the hardest, according to Russ Mould, investment director at AJ Bell. He points out that both companies are “saddled with debt after their respective takeovers”.

Mould adds that Tesco and Sainsbury’s are holding their own when it comes to market share, but suggests this doesn’t negate the impact the German discounters have had on their margins. He says: “Their margins are not expanding and remain in the low single digits, [revealing] how competitive this business really is.”

Changing consumer habits have also created a more challenging environment for traditional supermarkets over the past decade. The UK has seen a shift away from the big weekly shop, as households instead opt for shopping little and often.

This change in behaviour means consumers are more likely to visit several stores over the course of a week, shopping around for their favourite products and the best deals. The cost-of-living crisis has only accelerated this trend, as highlighted by a recent research report from the House of Commons Library.

The report writes that “46% of adults in Great Britain reported an increase in their cost of living in March 2024 compared to a month earlier”, with 89% pointing to increased food prices as the main reason for this. It adds that 49% were shopping around more as a result, while 38% were spending less on food shopping and essentials.

Have UK supermarket stocks delivered decent investor returns?

Nevertheless, it isn’t all bad news. We’re now just over halfway through the year, and Tesco and Marks & Spencer have posted decent returns so far in 2024.

Both stocks are up by around 5% year-to-date, broadly in line with the overall FTSE 100. Tesco paid a full-year dividend of 12.10p (a yield of 3.93%). Meanwhile, Marks & Spencer’s 3p dividend represents a yield of 1.03%.

Sainsbury’s share price performance, on the other hand, has been pretty poor. It is down by around 14% year-to-date. The company announced a full-year dividend of 13.10p (a yield of 5.12%), but it is unlikely to be enough to entice investors given the poor share price performance. They can earn the same yield by simply putting their cash in the bank.

Chris Beckett, head of equity research at Quilter Cheviot, says the supermarket remains “considerably smaller than Tesco, and in the high-volume, low margin world of food retail, scale is a critical factor and the ingredient for success”.

Commentators also point out that Sainsbury’s non-food business (including Argos) has experienced a slowdown of late, and is letting the side down.

Mould says: “It’s beginning to have a lot of similarities to the Marks & Spencer of old, running a two-pronged business with one engine constantly spluttering. Marks & Spencer has finally fixed its engine problem and is now racing away, which might give some hope to Sainsbury’s situation.”

If interest rates fall later this year and inflation continues to slow, supermarkets will be hoping to see shoppers putting more items in their baskets. This could create a tailwind going forward.
Posted at 02/7/2024 10:54 by philanderer
Victoria Scholar, head of investment at Interactive Investor, said: 'Argos is struggling with the backdrop of weak demand given that its offering isn't a priority for cash strapped consumers at this time.

'Sainsbury's boss even said consumers remain cautious when it comes to discretionary spending.

'Garden and home are also struggling amid the disappointingly wet weather and in the era post the pandemic DIY boom.'

Chris Beckett, head of equity research at Quilter Cheviot, said: 'While Sainsbury's has demonstrated some positive trends, particularly in grocery, the overall thesis remains that in food retail, the bigger businesses are generally better positioned to reap the benefits due to economies of scale, hence we prefer Tesco.'

Scholar of Interactive Investor, said: 'Investors have had a tough time with the stock, which is down around 16 per cent so far this year, compared to Tesco up over 4 per cent.

'And they have failed to get enthused by the supermarket's mixed performance today, with the stock shedding around 4 per cent.
Posted at 22/4/2024 22:00 by loganair
Jefferies upgraded its stance on a host of UK retail stocks on Monday - Marks & Spencer, Next and Sainsbury's were all upgraded to 'buy' from 'hold'.

On Sainsbury's, the bank said fears around an excess capex burden limiting free cash flow upside have provoked intense investor concern since the capital markets day in February.

"We believe this overstates the risks and overlooks the positives emerging from the most supportive competitive backdrop in UK grocery in decades," it said.

"SBRY in particular have outlined a multi-pronged approach to capitalising on this situation. As we noted after the CMD, the plan is to enable margin expansion through volume growth and opex control.

"All of which offer substantial upside to FCF, which we see at a cumulative £1.8bn over the next three years versus guidance for 'at least £1.6bn'."

Jefferies has a 300p price target on the shares.
Posted at 22/4/2024 15:47 by pirates4
I want to optimistic here, the way the economy is back on the move, sainsburys is outperforming rivals . Its quite possible to trend upwards at this moment in time, could be a eye-catcher for investors to hold for long term.jmo. and d.y.o.r comes with risks.
Posted at 28/3/2024 06:27 by unastubbs
The Times

Investors looking to pile their baskets high could do worse than consider shopping for Sainsbury’s, analysts at UBS have decided. The Swiss bank upgraded the supermarket to “buy” after concluding it was cheaper than Tesco. UBS said that Sainsbury’s had been consistently increasing its prices at a lower rate than its peers. Last month Sainsbury’s, which is Britain’s second-biggest supermarket with a 15.2 per cent market share, set a new cost savings target of £1 billion over the next three years. Sainsbury’s believes this will boost returns for its shareholders and UBS is in agreement, as the bank lifted its earnings forecast for the supermarket. Sainsbury’s pledged to shareholders that investments in technology and automation would improve its efficiency. UBS believes this will drive an increase in profit margins and thinks the supermarket will report underlying profits ahead of market consensus in its annual results. Analysts at UBS said the market had not taken into account the cash returns produced by Sainsbury’s and its margin recovery over the past few years. The bullish note boosted shares in the supermarket, which ended the day up 9½p, or 3.6 per cent, to 272p
Posted at 04/2/2024 10:08 by loganair
Interesting what is being said about Morrison's....

"The ultimate goal is clearly to restore the profitability and dividends for the company's private sector investors. Forecourts, city centre convenience stores and acting as wholesaler operators of smaller stores is part of the plan. But the ultimate goal must be to fatten up Morrison's for an eventual return to listed markets."

So far the private equity owners have sold and leases back Morrison's Manufacturing, warehouses and distribution centres and is about to sell all its petrol forecourts and freehold of their EV charging areas.

Then like with Debenhams or Woolworths after asset stripping, pay a couple of years of huge dividends to its private equity owners via taking on more debt then guess what relist Morrison's.
Posted at 16/12/2023 15:27 by loganair
The Fidelity article makes no sense to me.

1. Food inflation 9.1% - Sales growth 6.3% = less stuff being sold.

2. 28.4% sales made on promotion = less profit.

3. Sainsbury's are gaining market share - usually this comes at the expense of margins and therefore at the expense of profits.

Therefore it seems to me reasonable to say Fidelity are incorrect when they say this proves highly profitable for the major supermarket.

Always important to remember, Fidelity are in it for themselves, therefore they write articles in the hope that the private retail investor will invest some of their hard earned cash via investments in Fidelity products.
Posted at 06/12/2023 15:37 by loganair
Sadly these analyst rating and price targets are all but worthless as their motive is to do what is best for the financial house they work for and are usually working against the small retail investor - cheap lot of spoilers the lot of them.
Posted at 18/11/2023 13:09 by anhar
Skinny: Some of the Sainsbury's offers are getting slightly ridiculous, with 'proper prices' being fairy tale...

Tesco has long been like that where the loyalty card prices on many products are lower than the stated full amount. But considering that the great majority of Tesco shoppers will be cardholders anyway, for them the card price is the real price and the ostensible discount to some higher figure that they'll never have to pay is just a marketing gimmick of no benefit.

Incidentally I don't belong to that school of investors who base their decision on personal experience of the company, especially retailers and their local store. Imo this is likely to be very misleading so for me it's all about the numbers, the fundamentals, not whether I might prefer SBRY sausages to TSCO ones etc.
Posted at 07/11/2023 21:17 by spob
UK grocery inflation falls to single digits for first time in 16 months, data shows

Kantar’s figures suggest official statistics will be lower when published next week

Valentina Romei

UK grocery inflation has slowed to single digits for the first time in 16 months, according to sector data that will add to hopes of food prices normalising in the coming months after a long run of sharp increases for households.

The annual rate of supermarket price rises was 9.7 per cent in the four weeks to October 29, research company Kantar said on Tuesday, down from 11 per cent in September and well below the all-time peak of 17.5 per cent in March.

Tuesday’s reading, the first in single digits since July 2022, suggests that next week’s official food inflation figure will decline further, which would help bring down overall inflation and support real incomes.

This would be welcomed by policymakers as they seek to lower price growth from 6.7 per cent now to the 2 per cent target, and could ease pressure on the Bank of England to keep interest rates high for a prolonged period.

Last month, the Office for National Statistics said price growth of food and non-alcoholic beverages was 12.1 per cent in September, down from a 45-year high of 19.2 per cent in March. Wholesale food prices soared in the summer of 2022 following Russia’s invasion of Ukraine, hitting the poorest households hardest.

Last week, separate unofficial data showed UK shop price growth also eased to the lowest rate in more than a year.

Fraser McKevitt, Kantar’s head of retail and consumer insight, said the end of double-digit growth in grocery price inflation marked a “big milestone for the British public and retailers”.

But he cautioned that households were still “feeling the pinch” because of annual price falls in only a limited number of big categories including butter, dried pasta and milk.

Consumers were continuing to increase their purchases of supermarkets’ own-label products, rather than branded goods, and to favour cheaper retailers, according to Kantar. It said discounters Lidl and Aldi registered the fastest annual sales growth of 14.7 per cent and 13.2 per cent respectively compared with 7.9 per cent across the grocery sector.

Supermarkets, meanwhile, continued to try to soften the blow for shoppers, with the proportion of sales through deals increasing at every grocer compared with last year — something that has happened only once in the past decade.

Myron Jobson, senior personal finance analyst at the investment platform Interactive Investor, said: “Britons have been force-fed a diet of higher costs for basic necessities for a prolonged period and the fact that we’re seeing some easing in food inflation is really important for shoppers.”

Separate data on Tuesday from the British Retail Consortium, a trade body, and payments company Barclays showed a slowdown in the annual rate of retail sales and consumer spending to well below inflation, indicating that households were cutting back on purchases.

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