Sainsbury’s share price: Hargreaves Lansdown sees bigger picture as ‘challenging’

Comments come after grocer’s upbeat quarterly results

Sainsbury’s share price: Hargreaves Lansdown sees bigger picture as ‘challenging’

While J Sainsbury (LON:SBRY) has posted an upbeat set of results, analysts at Hargreaves Lansdown expect attention to revert to the intense competition between supermarkets going forward. The blue-chip grocer updated investors on its first-quarter performance yesterday, revealing forecast-beating sales.

Sainsbury’s share price has been little changed in today’s session, having inched 0.16 percent higher to 250.00p as of 09:14 BST, as compared with a 0.26-percent rise in the benchmark FTSE 100 index. The grocer’s shares have added more than 12 percent to their value over the last year, largely in line with the Footsie which is up by some 11 percent.

Citywire quoted Hargreaves Lansdown analyst Laith Khalaf as commenting yesterday that despite the sales rise at Sainsbury’s, the bigger picture remained challenging for supermarkets as the weaker pound pushed up food prices and sapped shoppers’ spending power while e-commerce giant Amazon circled the sector.

“The turf war the big supermarkets have been fighting against may start to look like a schoolyard skirmish if Amazon decides it wants a piece of the UK grocery market,” he pointed out.

Sainsbury’s posted a 2.3-percent rise in retail like-for-like sales, excluding fuel, for the retail like-for-like sales, excluding fuel. The results came amid reports that the UK grocer was eyeing a takeover of convenience store chain Nisa, having wrapped up its acquisition of Argos owner Home Retail Group last year.

“Little wonder then that the big UK supermarkets are turning to new areas to try to eke out a living,” Khalaf commented, as quoted by Citywire, adding that Sainsbury’s purchase of Argos seemed “to be delivering results and the supermarket is reportedly in talks to buy the convenience chain NISA to try and broaden its footprint”.

As of 09:28 BST, Wednesday, 05 July, J Sainsbury plc share price is 250.00p.

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