Blog: Dean BestSainsbury's faces fresh challenges after strong year

Dean Best | 8 May 2012

Sainsbury's, the UK's third-largest grocer, will tomorrow (9 May) report its annual financial results. Of the UK's largest food retailers, Sainsbury's has been one of the better performers in recent months but, as ever in the country's fiercely competitive market, it faces a new round of challenges over the next 12 months.

Initiatives including the Brand Match price-comparison scheme have enabled Sainsbury's to drive sales over the last year, while rivals like Tesco, and more recently Morrisons, have stuttered.

In March, Sainsbury's reported a 2.1% increase in like-for-like sales for the year to 17 March. Tomorrow, Sainsbury's is expected to report an increase in annual pre-tax profits of around 5%, a slowdown from the 9% increase it filed last year, an indication perhaps of the cost of competing in the UK grocery sector and also the expansion of its store network over the last year. However, Sainsbury's has won praise from industry watchers. Shore Capital analyst Clive Black says he believes Sainsbury's "has cranked out a very good performance" over the last 12 months.

Nevertheless, as ever in the UK's fiercely competitive market, Sainsbury's faces a fresh set of challenges, including Tesco's plans to revitalise its UK business and, interestingly, from Waitrose. Last week, Waitrose announced an extension of its own price-comparison initiative against Tesco, which as well as targeting the UK's largest retailer, could also lure some shoppers away from Sainsbury's.

The thoughts of Sainsbury's chief executive Justin King on these issues and more (including the Government's expected announcement tomorrow of an adjudicator to monitor dealings between retailers and suppliers) will be worth hearing.


BLOG

A bad fortnight for self-regulation

Recent events in Canada, Brussels and the UK suggest the task of defending self-regulation as the best way to prevent the commercial activities by food companies from exacerbating childhood obesity is...

BLOG

Reckitt Benckiser clears final Mead Johnson hurdle

The final regulatory approval needed for the UK-based consumer goods giant's takeover of the US infant formula maker has been received, with the US$17.9bn deal set to be completed on Thursday (15 June...

BLOG

Barilla puts sustainability centre stage

Barilla's 2016 results statement, published last week, makes interesting reading, not because of the Italian food group's commercial performance, but for the emphasis placed on sustainability achievem...

just-food homepage



Forgot your password?