Sainsbury (j) Share Discussion Threads

[loganair] 20/11/2019 14:19

It seems to me to be a successful retailer, who ever they maybe need to meet just one requirement - "Intelligently Know who your customers are and what they want."


Who are Sainsbury's customers and what do they want?

[loganair] 19/11/2019 20:58

Why I think Sainsbury’s will keep being a loser in 2020:


The supermarket’s challenge:

Sainsbury’s is the second-largest UK grocer behind Tesco, which overshadows it when it comes to market share. The latter has a commanding 27% of the market and has made major strategic steps forward in recent years, including acquiring the wholesaler Booker for £3.7bn and completing a strategic alliance with French group Carrefour to enhance buying power and drive down prices.

This progress that Tesco has achieved – even accounting for the fact it came after a period of turmoil – contrasts sharply with the perception of the leadership at Sainsbury’s, which failed in its major mission to acquire Asda. That £7.3bn deal, which would have made Sainsbury’s the biggest UK grocer, was blocked by the UK competition regulator.

Having failed to convince sceptics of the benefits of the deal, Sainsbury’s now looks vulnerable. Aldi and Lidl are taking market share, it’s trying to cut debt rapidly and the acquisition of Argos is not arresting a slump in profits. This begs the question: was the Argos buy a mistake and can Sainsbury’s really become an omnichannel retailer? The evidence would suggest it’s struggling.

The latest results:

Earlier this month, the supermarket reported a 15% fall in interim profits, which it blamed primarily on the phasing of cost savings, higher marketing costs and tough weather comparatives. The chief executive also apportioned blame to Brexit, although the extent to which people stop buying food because of an election or leaving the EU is hard to quantify.

These results show the group has struggled in recent times. It follows on from first-quarter results that also showed sales falling, so it’s far from being a one-off. In the 16 weeks to June 29, Sainsbury’s saw like-for-like sales down 1.6% excluding fuel. Falls came across grocery, general merchandise and clothing, indicating no part of the business is doing well, although it has to be said that clothing fell in Q1 but rose in Q2.

On the face of it according to the low P/E and the high dividend yield, the share price looks cheap. Though given the steep fall in the shares during 2019, I expect Sainsbury’s could continue to lose investors money throughout the next 12 months and beyond.

Personal note - I've always wondered what are QIA doing considering they bought their over 20% stake in Sainsbury's at around 600p per share???

[imperial3] 19/11/2019 19:32

Their Christmas advert is so bad,it just makes you wonder what the management were thinking.It just beggars belief that they approved it.

[tim 3] 19/11/2019 19:23

Actually they are normally good but in the last couple of years they have really lost it and the Tesco ad is really good this year imo

[ny boy] 19/11/2019 17:34

For sure they must have the Worst Christmas advert in history, sums up the management

[chiefbrody] 19/11/2019 14:04

Dont hold your breath on bus rates.Another review.No party seems to be capable or want to come up with some interesting/radical proposals.

[imperial3] 19/11/2019 10:27

Been edging up lately.

[ny boy] 19/11/2019 09:41

Tories long overdue proposals to cut business rates will be a positive here, S.P. has held 200p support after a consolidation period, should be finally ready to move higher

[loganair] 18/11/2019 12:05

The Sainsbury’s share price has fallen 33% in a year. Time to buy?


It’s difficult to overstate what a dire long-term investment J Sainsbury (LSE: SBRY) has been. The share price this year is at its lowest level on the chart I’m looking at — and the chart goes back to 1990! Thirty years of hurt, to borrow a famous refrain.

However, could this sorry history be about to reverse? In other words, is it time to buy the stock?

Recent performance:

Let’s make no bones about it, Sainsbury’s performance over the last half-decade hasn’t been any more encouraging than its longer-term achievement. Earnings per share (EPS) have fallen in four of the five years, and another drop is forecast for the current year (ending March 2020). The dividend per share (DPS) has been similarly disappointing, and is expected to be cut to a new low this year.

If you’d invested in Sainsbury’s before its interim ex-dividend date in November 2013, you’d have paid around 400p a share and gone on to pick up a decade-high 17.3p annual DPS, giving you a nice yield of 4.3%.

However, today, you’d not only be sitting on a near-50% capital loss, but also (after multiple dividend cuts) be in for a yield of just 2.5% this year on your original investment. Heck, you can get a better annual interest rate than that on some regular cash savings accounts, with no risk to your capital!

Market expectations:

Back in the summer, following its failed attempt to merge with Asda, I characterised Sainsbury’s as “a weak player in a tough market, and a company whose earnings outlook is deteriorating.”;

At the time of its last annual results release on 1 May, market expectations for fiscal 2020 had been for a £652m profit before tax (PBT). Sceptical analysts at Barclays had noted acerbically that the company “is aware it would need to say something if this was plainly unachievable.”

The company said nothing. Yet less than two months later, on 28 June, it quietly published a revised pre-tax profit consensus forecast on its corporate website. This was £20m lower at £632m.

I suggested:“Keep an eye on that analyst consensus page through the rest of the year. I suspect you may enjoy an object lesson in how struggling companies manage down ‘market expectations’.”

Charade:

In October, Sainsbury’s issued a restatement of its last annual numbers under new accounting rule IFRS 16, which it’s adopting this year.

On 5 November, the company also updated its analyst consensus page from pre-IFRS 16 forecasts of 28 June to post-IFRS 16 forecasts.

Looking at the significantly larger negative numbers in the forecast 2019/20 ‘difference217; line than in the restated 2018/19 results, I’d suggest what we’re looking at here is another backstairs managing down of ‘market expectations’, wrapped up in the change to IFRS 16.

I wouldn’t be surprised to see a further massaging down of this year’s numbers, and I wouldn’t trust current fiscal 2021 forecasts (PBT £595m, EPS 20.2p and DPS 10.3p) as far as I could throw them. As such, this remains a stock to avoid, in my view.

[nick rubens] 15/11/2019 11:09

Yes, but horsemeat thrown in with beef and from animals never accounted for or tested or checked for origin or for health is hardly a healthy option.

[alphorn] 15/11/2019 10:49

I don't personally eat horse meat as I used to ride - only reason. Widely eaten in Switzerland especially for meat fondues, more tender and better health wise.

[nick rubens] 15/11/2019 10:42

Most important trading period now. Electrical retail to worry about as well as groceries.

I hope the general population are watching the BBC series. Last night showed Sainsbury's Laboratory testing their meat products.

This is why the horse meat scandal never reached Sainsbury. They actually test everything and check their products robustly (meat suppliers), unlike the other regular supermarkets that sell anything anyone produces for them as long as it's cheap and the public aren't aware of their lack of quality control.

Still won't invest in the shares though.

Did anyone get found out over horse meat and brought to account?

[abarclay] 15/11/2019 08:16

Rally hard

[imperial3] 14/11/2019 18:53

Just what I thought!

[loganair] 14/11/2019 17:01

Most the technology that the supermarkets are currently using is Windows XP - way out of date.

[nick rubens] 14/11/2019 16:41

Not sure what the thinking is here about not using the self service app or self service checkouts, claiming to be doing check out staff a favour or service by helping them stay put on their check out jobs?

The check outs must be one of the less appealing jobs in a supermarket. I'm certain those check out workers would quite happily want to be redirected elsewhere (in store), so using the app/self service is a good thing. It would free them up to be doing something else and most likely more preferable to them. It won't lead to job losses, it will make the supermarket more efficient.

Job losses come when a supermarket chain loses profitability due to not adapting to modern times and modern technology.

Once your profits continue to diminish and your growing debts can't be paid or even serviced with interest payments or rollovers, the business becomes more like a failing ponzi and then everyone's job is at risk.

[neilyb675] 14/11/2019 14:53

2. Board Ridged.

Have you ever been to school?

[onjohn] 13/11/2019 22:44

ex div tomorrow

[loganair] 13/11/2019 22:06

This years Sainsbury's Christmas ad fails on many points:

1. Very Demanding to watch, a chore to watch.
2. Board Ridged.
3. Left me feeling cold inside.
4. Left me feeling Miserable.

Even now when I watch Sainsbury's 2014 Christmas ad, the British meeting the Germans in no mans land truce is still very emotional for me to watch, still brings tears to my eyes.

[muffinhead] 13/11/2019 21:44

Quality video production yes... nostalgia. But will it influence people to shop at Sainsburys over Christmas? Probably appeals to brand loyal customers imo
Are they really going to run this advert for 2 mins 31 seconds?


Aldi 1 min and 11 seconds with Robbie Williams singing
Entertaining, festive and no nostalgic baggage


Lidl 1min.... fun and family orientated

[neilyb675] 13/11/2019 21:42

sharesave price confirmed at £1.61. Beautiful.

[tardelli2] 13/11/2019 20:16

It's brilliant

[imperial3] 13/11/2019 17:21

Just seen their Christmas advert.Quite frankly,it is absolutely dreadful.