Sainsbury’s set for grocery growth despite wet weather
The retailer is set to update shareholders on its performance over the quarter to the end of May, with figures on Tuesday.
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Your support makes all the difference.Sainsbury’s is expected to reveal further sales growth for the past three months, but could see some impact from poor spring weather and continued cost-of-living concerns.
The retailer is set to update shareholders on its performance over the quarter to the end of May, with figures on July 2.
Investors and analysts are hoping the company will shed light on consumer sentiment over the spring and summer.
The company is predicted to report a 4.7% increase in grocery sales – 5.5% on a like-for-like basis – according to analysts from HSBC.
It would represent a slight slowdown on the final quarter of the previous financial period, when total grocery sales grew 7.3%.
However, this is predominantly linked to the significant easing of food and drink inflation.
In April, Sainsbury’s said it saw volume growth pick up as shoppers saw the price of more products drop or at least stabilise.
It will be keen to report further improvements in volume growth, after winning customers from some of its main competitors last year to increase its share of the UK grocery market.
Analysts have said they expect sales momentum to have continued in the latest update, despite damp weather in the April and May impacting consumers.
HSBC’s head of European consumer research, Paul Rossington, said: “We expect another strong quarter of core grocery growth despite slow start to spring and summer season.”
In its previous update in April, the supermarket chain also highlighted some weakness in general merchandise, including its Argos arm which has been closing stores over the past year.
Shareholders will be hopeful that easing inflation in some areas will help support demand for big ticket items in general merchandise, such as home technology and furnishings.
Elsewhere, earlier this month Sainsbury’s struck a deal to sell the bulk of its banking business to NatWest.
The move was part of plans from the retail group to simplify its operations, having earlier said it was considering winding down its banking operations.
Analysts have appeared positive about the mood, and broader efforts by the company to focus more on its core Sainsbury’s store and online businesses.
Shore Capital’s Clive Black said he saw the “announcement as another important stepping stone in the simplification of the Sainsbury business and whilst not a surprise, we welcome this development.
“Meanwhile, Sainsbury’s is starting the expansion of its Grocery footprint within its retail estate whilst progressing its strong food assortment, which is now well and truly lapping market share gains.”