The Lemon Fool

Last week’s news that the Competition and Markets Authority (CMA) has blocked the proposed merger between J Sainsbury (LSE: SBRY) and Walmart’s Asda sent Sainsbury’s share price plunging. So is the stock now a bargain that I should snap up?

The CMA thinks consumers would have been worse off because of rising prices if it had allowed the deal. But Sainsbury’s chief executive, Mike Coupe, is on record as saying that “the specific reason for wanting to merge was to lower prices for customers.” He went on to explain that he thinks the CMA’s decision ignores the “dynamic and highly competitive nature” of the grocery market in the UK. Nevertheless, the two firms have no intention of appealing the decision. It’s over. The idea didn’t work.

First Quarter Trading Statement for the 16 weeks to 29 June 2019

Improving market share performance in a tough market

· Total retail sales down (1.2) per cent (excl. fuel) with like-for-like sales down (1.6) per cent (excl. fuel)

· Grocery sales declined (0.5) per cent

· General Merchandise sales declined by (3.1) per cent and Clothing sales declined by (4.5) per cent

Mike Coupe, Chief Executive, said: "We continue to adapt our business to changing shopping habits and made good progress in a challenging market. We reduced prices on over 1,000 every day food and grocery products and improved our relative performance1. Our premium Taste the Difference ranges are growing market share2 and we continue to improve customer service and availability. In a tough trading environment, we gained market share in key General Merchandise categories3 and in Clothing, where we are now the UK's fifth largest retailer by volume4.

Second Quarter Trading Statement
· Stronger trading across Grocery, General Merchandise and Clothing
o Further improvement in our performance relative to the market, particularly Grocery1
· Second quarter total retail sales up 0.1 per cent (excl. fuel), with like-for-like sales down (0.2) per cent (excl. fuel)
· Grocery sales increased by 0.6 per cent
· General Merchandise sales declined by (2.0) per cent and Clothing sales increased by 3.3 per cent

Dod101 wrote:Surely that sounds like market noise?

Dod

idpickering wrote:

Dod101 wrote:Surely that sounds like market noise?

Dod

Maybe, but they're doing well today, being up nearly 2%, in a weak overall market. I'm still not tempted to buy back into SBRY though. I don't hold any retail shares now, and of those on offer, I do think SBRY are the best still.

Ian.

daveh wrote:Interesting that both Sainsbury and Tesco seem to be pulling out of the mortgage side of banking as Tesco have sold their mortgage book to Lloyds (AFAIR) and Sainsbury have said they will not be issuing new mortgages in this update.

Alaric wrote:

daveh wrote:Interesting that both Sainsbury and Tesco seem to be pulling out of the mortgage side of banking as Tesco have sold their mortgage book to Lloyds (AFAIR) and Sainsbury have said they will not be issuing new mortgages in this update.

What was their logic for going into financial services? Perhaps the opinion that their name and reputation was better than banks. Will we also see them pull back from savings accounts and credit cards? I don't think Sainsbury's any more, but Tesco also dabble in mobile phone networks.

flyer61 wrote:I do not own any supermarket shares. The only winner is the consumer in this never ending knife fight in a telephone box that the supermarket Companies are involved in.

Grocery sales grew 0.4 per cent, with Groceries Online up 7.3 per cent
Clothing sales grew by 4.4 per cent
General Merchandise sales declined by 3.9 per cent
Total online sales grew by 5 per cent
Total retail sales declined by 0.7 per cent (excl. fuel), with like-for-like sales down 0.7 per cent (excl. fuel)

Committing £1 billion over twenty years to achieve this

· Commitment will see Sainsbury's business and operations become Net Zero in line with the goal to limit global warming to 1.5°C, the highest ambition of the Paris Agreement*

· Focusing on reducing carbon emissions, food waste, plastic packaging, water usage and increasing recycling, biodiversity and healthy and sustainable eating

· Sainsbury's will work collaboratively with suppliers and will ask suppliers for their own carbon reduction commitments

 Grocery sales up 10.5 per cent
 General Merchandise sales up 7.2 per cent (including Argos sales up 10.7 per cent) and Clothing sales
down 26.7 per cent
 Digital sales more than doubled
 Total retail sales up 8.5 per cent (excl. fuel) with like-for-like sales up 8.2 per cent (excl. fuel)
 Profit impact of COVID-19 expected to be more than

idpickering wrote:First Quarter Trading Statement for the 16 weeks to 27 June 2020

 Grocery sales up 10.5 per cent
 General Merchandise sales up 7.2 per cent (including Argos sales up 10.7 per cent) and Clothing sales
down 26.7 per cent
 Digital sales more than doubled
 Total retail sales up 8.5 per cent (excl. fuel) with like-for-like sales up 8.2 per cent (excl. fuel)
 Profit impact of COVID-19 expected to be more than...

https://www.investegate.co.uk/sainsbury ... 00046218R/

...£500m, broadly offset by business rates relief and stronger grocery sales, as previously outlined