Sainsbury’s set for sales increase after price investment
The UK’s second-largest supermarket chain will update shareholders on its trading performance for the past half-year on Thursday November 7.
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Your support makes all the difference.Sainsbury’s is set to reveal stronger sales amid a continued boost from Nectar prices and discounter price-matching.
The UK’s second-largest supermarket chain will update shareholders on its trading performance for the past half-year on Thursday.
Analysts have predicted it will report a rise in sales for the six months to September, with industry data suggesting Sainsbury’s has seen its share of the UK grocery market climb higher, at the expense of rivals such as Asda and Aldi.
Jefferies analysts have predicted Sainsbury’s will report revenues of £17.5 billion for the half-year, compared with £17 billion over the same period a year earlier.
It expects growth to have improved over the summer despite wet weather, predicting like-for-like growth, excluding fuel, of 4.1% for the second quarter, after 2.7% growth in the first quarter of its financial year.
In its previous update in July, the retailer said its grocery sales lifted 4.8% as the firm saw robust growth by volume in its first quarter amid a boost from the Euro 2024 football tournament.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Sainsbury’s put in a good showing in its first-quarter results, and investors were relieved to see a volume-driven uplift in the grocery business.
“But consumers haven’t been as hungry for clothing and general merchandise, which both posted declines in the period.
“And thanks to its ownership of Argos, its extra exposure on the general merchandise front has weighed on overall performance.”
In July, the group revealed that sales in its general merchandise and clothing division fell by 4.3% over the first quarter, as shoppers were cautious about larger purchases.
Nevertheless, the company is predicted to deliver robust growth in its latest update on the back of improving sales volumes, as food and drink inflation has eased back after sharp increases seen over the past two years.
Earlier this week, Sainsbury’s also struck a deal to sell its Argos credit cards business for £720 million as it retreats from financial services.
The card portfolio will be acquired by credit provider NewDay Group.
The agreement comes several months after Sainsbury’s struck a deal with NatWest to sell the bulk of its banking business, including personal loans, credit card balances and customer deposits.
It also recently agreed to sell its roughly 1,370 ATM machines to operator NoteMachine.
Investors will hoping for an update on what this strategy means for their returns on Thursday.