‘Sluggish’ figures in store as Sainsbury’s gives trading update
SAINSBURY’S is set to report a dip in first-quarter sales this week, with boss Mike Coupe expected to be questioned on the progress of the supermarket’s £12bn merger with Asda.
The grocery giant is tipped by analysts at Barclays and Jefferies to report a 0.1 per cent fall in likefor-like sales in the three months to July, after a 0.9 per cent rise in the fourth quarter of last year.
James Grzinic, of Jefferies, said that the trading update would be “sluggish”, with soft demand for general merchandise products at Argos behind the dip.
It would confirm recent figures from Kantar showing that sales at Sainsbury’s slipped 0.2 per cent over the past 12 weeks and its market share fell 0.4 per cent to 15.6 per cent.
The data was in stark contrast to rivals Asda, Tesco and Morrisons, where sales have been boosted by the heatwave.
Lacklustre figures aside, focus is expected to fall on the Asda merger, with Mr Coupe to face further probing over the deal as analysts turn their attention to the Competition and Markets Authority (CMA) investigation. Barclays analyst James Anstead said: “We have long thought that the merger of Sainsbury’s and Asda makes sense – the question is whether the competition remedies will render the proposed deal uneconomic.
“The view of the CMA will likely remain unknown until mid2019. We are sceptical about store disposals being highly material given that both companies have taken extensive advice and are investing considerable credibility into the transaction.”