Sainbury issued a promising trading statement last week but why no mention of margins? It's not alone with all the other multiples reluctant to cover margins in their quarterly updates. Good see that Marks gives them a mention.
Commentary at www.investorschampion.com

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Company News



Tue, 17 November 2015


Sainsbury's gains share as discounters claim fifth of grocery market, says Kantar



Sainsbury (J) Quote more






Price: 248.40

Chg: 5.20

Chg %: 2.14%

Date: 17:00



FTSE 100 Quote


Price: 6,268.76 Chg: 122.38 Chg %: 1.99% Date: 17:14

(ShareCast News) - Discounters Aldi and Lidl have reached a combined share of 10% of the British grocery market for the first time, while Sainsbury's became the first major supermarket to claim a market share increase for over a year.
The overall grocery market remained slow in the 12 weeks to 8 November, with sales up by 0.5% according to data from industry research house Kantar Worldpanel, down from the 0.8% announced a month ago.

Revenues continue to be held back by the fierce price war that saw prices down by 1.7% on a like-for-like basis.

Sainsbury's market share increasing by 0.2 percentage points to 16.6% thanks to a 1.5% increase in sales and, as a food-focused retailer, the company traditionally increases its market share over Christmas so could increase its share further by the end of the year.

Sales fell at the rest of the major retailers, with Tesco down by 2.5% and Morrisons sales falling 1.7%.

Asda sales declined 3.5% but the WalMart-owned chain recently announced a slimlined product range, further price investment and increasing click-and-collect opportunities in its stores.

But the continuing rise of the discounters remains a concern for the 'big four', signalling no end to the price battle.

"If you look back as recently as 2012 Aldi and Lidl only held a 5% share of the market, and it had previously taken them nine years to double their combined share from 2.5%," said Fraser McKevitt, head of retail and consumer insight at Kantar.

He noted that in the last 12 weeks the two retailers have attracted another additional million shoppers compared with last year while average spend per trip has increased by 4% to £18.85, which is 78p ahead of the total retailer average.

"The discounters show no sign of stopping and with plans to open hundreds of stores between them, they'll noticeably widen their reach to the British population."

Lidl's market share reached a new record high of 4.4%, increasing by 0.7 percentage points on last year thanks to a sales growth of 19%.

Aldi grew sales by 16.5%, keeping its market share at 5.6% for the fifth consecutive month.

StockMarketWire.com
Sainsbury's confirmed it made an approach in November to Home Retail regarding a possible offer for the Group and that this approach was rejected but that it is considering its position.

Home Retail said the approach both undervalued the company and its long-term prospects.

Sainsbury continued:
"Over the last year, Sainsbury's has been working in partnership with Home Retail Group trialling a number of Argos concessions in Sainsbury's stores. The Board of Sainsbury's believes the combination of Sainsbury's and Home Retail Group is an attractive proposition for the customers and shareholders of both companies, establishing a platform for long-term value creation. The combination is an opportunity to bring together two of the UK's leading retail businesses, with complementary product offers, focused on delivering quality products and services at fair prices, through an integrated, multi-channel proposition.

Specifically, the Board of Sainsbury's believes a combination of Home Retail Group and Sainsbury's will:

- Create a food and non-food retailer of choice for customers, building on the strong heritages of both businesses whose brands are renowned for trust, quality, value and customer service;

- Deliver profitable sales growth by offering customers the right combination of location, range, speed and flexibility, across a wide range of products;

- Bring together multi-channel capabilities and delivery networks for fast, flexible and reliable delivery to store or to home across a wide range of food and non-food products;

- Optimise the use of their combined retail space. The combined entity would have attractively located stores across the UK, with an enhanced supply and delivery network and a strong presence across food and grocery, clothing, homewares, toys, stationery, electricals, furniture and other general merchandise;

- Create a financial services proposition that will provide a wider range of customer-centric services including credit cards, loans, deposits, insurance and ATMs;

- Deliver revenue synergy potential through the ability to sell to each other's customers, including the operation of Argos concessions within Sainsbury's stores, and the sale of Sainsbury's products and services through Argos's network;

- Provide additional cost synergy potential through property rationalisation, scale benefits and operational efficiencies.

Sainsbury's reserves the right to introduce other forms of consideration and/or vary the mix of consideration. In accordance with Rule 2.6(a) of the Code, Sainsbury's must, by not later than 5.00 p.m. on 2 February 2016, either announce a firm intention to make an offer for Home Retail Group in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for Home Retail Group, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of Home Retail Group and the Takeover Panel in accordance with Rule 2.6(c) of the Code." At 12:31pm

3rd Qt. Trading statement http://www.moneyam.com/action/news/showArticle?id=5191945

Sainsbury's and Home Retail have come to an agreement over the terms of a deal that values the Argos owner at about £1.3bn. Home Retail shareholders will receive 55p in cash and 0.321 Sainsbury's shares for each of their Home shares, plus
a 2.8p in lieu of a final dividend in respect of the financial year ending 27 February.

SBRY's total underlying Q4 sales rise

StockMarketWire.com

Sainsbury said, in a Q4 trading statement, that total retail sales excluding fuel rose 1.2%, but were up 0.5% if fuel was included. Q4 like-for-like retail sales rose 0.1% excluding fuel, but fell 0.4% including fuel.

FY total retail sales excluding fuel were up 0.4%, but on a like-for-like basis fell 0.9%. Including fuel, total sales fell 1.2% and like-for-like sales fell 2.5%.

CEO Mike Coupe said:

"We have delivered a strong performance this quarter. Our supermarkets recorded both like-for-like transaction and volume growth and we continue to exceed our internal metrics for service and availability.

"We also maintained our market share in the quarter. The market will remain competitive as food deflation continues to impact sales growth.

"We are progressing well with our quality investment in 3,000 own-brand products. The New Year is traditionally a time when customers focus on healthy eating and to cater for this demand we launched a number of vegetable-based product innovations including boodles (butternut squash noodles) and courgetti (spiralized courgette) which are proving extremely popular with our customers.

"We also introduced new lines to our healthier bread range including the rye loaf and sprouting grain boule, both of which are high in fibre.

"Our promotional participation levels continue to reduce year-on-year, running at an average of 28 per cent for the quarter[2]. Customers have told us that multi-buy promotions do not meet their shopping needs today.

"They are often viewed as confusing, create storage challenges and unnecessary waste. In response to this, we recently announced that we will be phasing out the vast majority of our multi-buy promotions across grocery products by August this year.

"We will continue to simplify our trading strategy in favour of lower regular prices. We are also committed to reducing waste and in January we launched our Waste less, Save more initiative in Swadlincote, Derbyshire. The town will receive �1 million to trial the latest technology and innovations in reducing household waste.

"Our in-store operational metrics for service and availability remain excellent and are beating our internal targets. Year-to-date we have won 16 Grocer 33 Service & Availability awards, ahead of our run-rate in the previous year.

"We opened 16 convenience stores including our second micro store in Richmond. Groceries online sales grew at nearly 14 per cent and orders by nearly 19 per cent. We simplified our online nectar redemption process, making it easier for customers to redeem their points, and improving the online customer experience.

"Clothing delivered over ten per cent growth and we introduced our 22nd Gok Wan collection which had its best ever February launch. Entertainment also performed well, with nearly 11 per cent growth driven by some big releases in the quarter.

"Sainsbury's Bank continued its good performance with 15 per cent volume growth in Insurance new business and 12 per cent growth in Travel Money in-store transaction volumes.

"We have traded well this year and are making excellent progress implementing our strategy. The market will remain competitive but we are confident that we will continue to outperform our major peers."

Good time to short this one. Perhaps further to fall, with the update next week.

Had a good run since July, maybe pushing my luck a wee bit but gone long on the spreads @ 250.40p.

Trading Statement Wednesday, target 270p tight stop.

LATEST BROKER VIEWS

Date Broker New target Recomm.
26 Sep Jefferies... 250.00 Hold
26 Sep Credit Suisse 315.00 Outperform
21 Sep Deutsche Bank 280.00 Buy
21 Sep Barclays... 270.00 Equal weight
20 Sep Exane BNP... 265.00 Outperform
14 Sep Exane BNP... 265.00 Outperform
14 Sep Barclays... 270.00 Equal weight
31 Aug Citigroup N/A Neutral
24 Aug Deutsche Bank 280.00 Buy
5 Aug Exane BNP... 260.00 Outperform

Not sure if 270 is on the cards anytime soon.

Take bits out of statement that suits your remit.

Holding at the moment.

Guess so Claret, got out of s/bet at the open. On watch list though.

confess i have avoided all supermarkets for a year or more
i think they're a total disaster sector

you might want to look at GNK as this late hot spell we've being having must surely help their next set of figures

Think SBRY better placed than Asda at mo. Depends what impact if any, on Argos takeover.

as i said above, i wouldn't want any supermarket group in my portfolio, nor M&S which is a total disaster

Agree with sentiment on Supermarkets. But still made a decent profit at SBRY.

Some support @ 240p and if sp manages to stay above 50DMA hope springs eternal. Glass half full for now.

Held steady and now back above 25DMA. For how long who knows, but at least that's September out of the way.

LATEST BROKER VIEWS

Date Broker New target Recomm.
29 Sep Beaufort... N/A Hold
29 Sep Exane BNP... 265.00 Outperform
29 Sep Deutsche Bank N/A Buy
29 Sep HSBC 185.00 Reduce
28 Sep Shore Capital N/A Under Review
26 Sep Jefferies... 250.00 Hold
26 Sep Credit Suisse 315.00 Outperform
21 Sep Deutsche Bank 280.00 Buy
21 Sep Barclays... 270.00 Equal weight
20 Sep Exane BNP... 265.00 Outperform

A few good days. Looking for 280p