Sainsbury Boosted by Christmas Grocery Sales

(Bloomberg) --

J Sainsbury Plc was held back by weak toy sales over the holiday period, which took the shine off gains in its online grocery business.

• The U.K. supermarket operator said comparable sales excluding fuel dropped 0.7% in the 15 weeks through Jan. 4, in line with analysts’ expectations.
• Sainsbury said the U.K. market remained highly competitive and promotional but it’s following through on its strategy.

Key Insights

• Sainsbury reported a better festive period than smaller rival Wm Morrison Supermarkets Plc, as gains in grocery and clothing sales offset a decline in general merchandise.
• The larger supermarket operator, in particular, continues to face tough competition from discounters Aldi and Lidl.
• Investors have been concerned about Sainsbury’s pricing and product availability. The grocer is still trying to convince them it has a solid standalone strategy following the failure of its plan to acquire Walmart Inc.’s Asda.

Market Reaction

The shares fell as much as 2.1% early Wednesday in London and are down 14% over the past 12 months.

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To contact the reporter on this story: Deirdre Hipwell in London at dhipwell@bloomberg.net

To contact the editor responsible for this story: Eric Pfanner at epfanner1@bloomberg.net

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