SAINSBURY’S is expected to show more trading resilience than supermarket rival Morrisons did last week when it unveils interim profits on Wednesday.
Analysts at broker Jefferies expect Sainsbury’s, Scotland’s fourth biggest food retailer, to report like-for-like half-time sales down 1.6 per cent. This would be an improvement on the 1.8 per cent fall in same‑store sales over the previous six months.
By contrast, Morrisons posted underlying sales down 2.6 per cent in its third trading quarter to 1 November, worse than the 2.4 per cent decline seen in the previous three months.
Mike Coupe, who took over as Sainsbury’s chief executive in July 2014, has since unveiled a plan to fight back against the food retailing discounters that includes a £150 million price promotion campaign behind 1,100 items.
The retailer was the only major supermarket group to see sales rise – by 1.1 per cent – in the 12 weeks to 11 October, according to the latest till roll figures from researchers Kantar Worldpanel.
Shore Capital analyst Clive Black said Sainsbury’s “remains relatively resilient, particularly to any commercial challenge from a recovering Tesco”.
Coupe said last year that one in four of his stores have underused space, and that over the next five years this will be used for concession partnerships and to expand its non-food offer.
However, he said last summer that price deflation still currently stalked the grocery sector and he expected this to continue into 2016.
Sainsbury’s is expected to say this week that deflation has continued to eat into profit margins, with Jefferies forecasting a 22 per cent fall in profits to £293m.
One analyst said: “There are no silver bullets for the supermarkets, what with the incursions of Lidl and the like, plus deflation.”