Sainsbury's Half-Year Results: What The Analysts Said

By Steve Wynne-Jones
Share this article
Sainsbury's Half-Year Results: What The Analysts Said

Earlier today, Sainsbury's posted like-for-like sales growth of 0.6% in its first half, with grocery and general merchandise sales boosted by the UK's hot summer.

“We have delivered a solid first half performance and profit has increased because we have delivered significant Argos synergies ahead of schedule," commented Mike Coupe, Sainsbury's chief executive. "Sales of food and general merchandise were boosted by the hot summer, but general merchandise margins remain under pressure."

Here's how some leading retail analysts viewed Sainsbury's performance.

Martin Lane,

"Despite the uncertain times and lowered profits Sainsbury’s have still managed to gain positive sales results. With the heatwave proving positive for them this summer they’ll be hoping for a stroke of luck in the festive season too. The real work starts now though as the battle for the Christmas shoppers commences.

"With more Argos stores popping up in Sainsbury's across the country they’ll be hoping people choose to use them as their one stop shop for their groceries and Christmas shopping. With discount retailers nipping at their heels, Sainsbury’s will need to pull something out of the bag to keep these positive results up.


"Keeping customers loyal is key for the supermarket and with talks still underway about a merger with Asda, it will be interesting to see whether consumers want to shop at this new hybrid store or take their custom elsewhere."

Bruno Monteyne, Bernstein Research

"Q2 Retail LFL (ex-fuel) of +1.0% beat consensus of +0.8% by +20bps. That is a welcome 80bps step up from the +0.2% achieved in Q1, but still behind peers.

"Net debt fell by £530m since the start of the year to £834 million, which was 32% better than we expected. However, this was due to: (1) phasing impact reversing in H2, and (2) timing of capital injections into the Bank. The company maintain their guidance to reduce net debt by £100 million for the year. Retail FCF of £619 million was +99.7% better than we expected, boosted by strong cash generation and the timing of bank capital injections."

Russ Mould, AJ Bell

“Half year like-for-like sales growth of 0.6% for Sainsbury’s may show an acceleration from the 0.2% growth reported in the first quarter, yet it still seems disappointing when you consider the period included the very hot summer which should have driven additional business for the supermarket and its Argos chain.


“So why hasn’t sales growth been a lot better? First of all, the company has been cutting prices to stay competitive. It also appears to have had some operational issues as the general public has flooded social media for months with pictures of empty shelves in stores across the country.

“Shoppers will quickly lose patience if they can’t find what they want. There are plenty of alternatives, so Sainsbury’s risks losing business to rivals if it cannot keep its shelves stocked."

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

Get the week's top grocery retail news

The most important stories from European grocery retail direct to your inbox every Thursday

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our terms & conditions and privacy policy. You can unsubscribe at any time.