Sainsbury’s share price: Grocer unveils sales growth ahead of Argos bid deadline
J Sainsbury (LON:SBRY) saw its like-for-like sales inch higher in the last three months of its financial year, marking its first quarterly growth in over two years. The upbeat results come ahead of a deadline for a formal bid for Home Retail, with Sainsbury’s currently mulling a higher offer after South Africa’s Steinhoff recently tabled a counterbid for the Argos owner.
Sainsbury’s share price has been subdued despite the rise in quarterly sales, with the company expecting the market to remain competitive. As of 08:56 GMT, the grocer’s shares were changing hands 0.68 percent in the red at 278.70p, in line with losses in the benchmark FTSE 100 index which currently stands 0.68 percent lower at 6,132.44 points.
Sainsbury’s announced in a statement this morning that its like-for-like sales, excluding fuel, had inched 0.1 percent higher in the nine weeks to March 12.
“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,” the group’s chief executive Mike Coupe said in the statement. He, however, noted that the market would remain competitive with food deflation continuing to impact sales growth.
The update follows recent Kantar data which suggested that the group is faring better than its other ‘big four’ rivals, with German discounters Lidl and Aldi continuing to grab a bigger slice of the UK grocery market.
“It looks like Sainsbury’s is beginning to outpace its other ‘big four’ rivals in the ongoing price war,” Alex Joyner, senior market analyst at Galvan Research, said, as quoted by City A.M. “Challenges remain for the grocer, but the first quarterly sales growth in over two years is a great sign and should help with its takeover approach for Home Retail.”
Sainsbury’s, which is reportedly considering hiking its £1.3-billion offer for the Argos owner in an effort to see off rival bidder Steinhoff, however, made no mention of the bid in its quarterly results. Under UK takeover rules, the two rivals have until 17:00 GMT on Friday to make formal offers or walk away.
As of 09:24 GMT, Tuesday, 15 March, J Sainsbury plc share price is 278.95p.
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