UK retailer Sainsbury's will be largely pleased with its Q3 performance, which saw the group's grocery banner post a 0.8% increase in sales, and its Argos operation post a 4.1% increase. Here's how leading retail analysts saw it.
David Alexander, Senior Analyst at Verdict Retail
"Sainsbury’s premium ranges appear to have hit the right note over a Christmas during which grocery shoppers across the board seem to have shown a willingness to splash out. Its approach to channels is something that Sainsbury’s really does do well, reflected in strong performances from online and convenience. […] While Sainsbury’s more buoyant numbers should be qualified by the context of widespread festive cheer in the grocery market, turnarounds do not generally happen overnight and the signs are there that it is beginning to hit the right notes again. The challenge will be to continue to emphasise its points of difference, but with Argos on board, it may just have found its trump card."
Bruno Monteyne, Bernstein Research
"This is a very solid Sainsbury's trade update. At first glance it may seem below Morrisons (and probably Tesco tomorrow) two explain this: (1) Sainsbury's Q3 is a 15 week quarter (containing Christmas) rather than a shorter Christmas period as reported by Morrisons (9 weeks) and Tesco (6 weeks). Therefore the Christmas bumper sales has less of an impact. (2) Sainsbury's has performed the best of the big-4 over a longer 2 or 3 year period so they don't have the benefit of easy comparatives."
Barclays European Food Retail Equity Research
"Clearly these numbers are both nicely ahead of expectations. Unlike Morrison yesterday, the company makes no comment on its profit expectations, which suggests it is reasonably comfortable with its own consensus of 16/17 PBT of c£573m. Although Argos growth was very strong, the categories in which it has done well (eg technology) tend to generate thin margins, so the beat on sales does not necessarily bring the same readacross for profit."
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.
