Quarterly sales uplift on cards for Sainsbury’s

Sainsbury’s is expected to report a sales recovery when it announces first quarter results this week.

The supermarket giant is tipped by City analysts to report a 2% rise in like-for-like sales over the period, a significant improvement on the last quarter’s 0.3%.

While the core supermarket business continues to face headwinds, overall sales are expected to be boosted by a further rise in inflation and a strong performance in non-food categories, as well as growth at Argos.

James Grzinic, analyst at Jefferies, said the performance will be boosted by “recovering supermarket like-for-like sales, albeit with growing inflation masking soft food volume performance, and solid Argos gains”.

The pound’s collapse following the Brexit vote has driven up inflation which, in moderation, can help supermarkets boost their sales and profit margins.

However, it can also drive shoppers to seek out bargain alternatives as rising costs are passed on to consumers.

In May, the chain warned over a hit from falling consumer confidence as price hikes start to bite after it suffered its third straight year of falling profits.

The group revealed bottomline profits dropped 8.2% to £503 million for the year to March 11, while underlying profits fell 1% to £581m.

Sainsbury’s is expected to post an uplift in sales.