CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Sainsbury's share price: Will today's 4% sales drop hit SBRY?

By Adrian Holliday


Price lock promise in Sainsbury's store
Labour leader visits Supermarket To Highlight Cost Of Living Concerns - Photo: Getty

UK supermarket chain Sainsbury's (SBRY) reported a 4% fall in underlying sales for its first quarter. Grocery sales fell 2.4% over the quarter to June 25 and general merchandise sales fell 11.2%.

CEO Simon Roberts commented:

"The progress we are making on improving value, quality, innovation and service is reflected in our improved grocery volume market share.

"The pressure on household budgets will only intensify over the remainder of the year and I am very clear that doing the right thing for our customers and colleagues will remain at the very top of our agenda."

Sainsbury's said it still expected its underlying pretax profit for the year to be between £630m and £690m.

The company also said its chief financial officer Kevin O'Byrne would retire in March 2023 and be suceeded by commercial and retail finance director Blathnaid Bergin.

What is your sentiment on SBRY?

Vote to see Traders sentiment!

Sainsbury (SBRY) share price – buy or sell?

Supermarket share prices: one year and five years (in brackets)

  • Tesco share price +15.1% (+18.9%)
  • Sainsbury share price -23.7% (-15.7%)
  • M&S Group share price -11% (-57.4%)

Sainsbury shares, in fact, are trading barely any higher than they were in early 1989.  

Russ Mould, investment director at AJ Bell, says investors are unconvinced the FTSE 100 grocer is getting its game right, especially as 2016’s £1.4bn purchase of Argos is no longer the nifty move it looked at the time.

Consumers are struggling as prices soar above pay growth and the economy weakens: food inflation is predicted to hit 15% this summer, grocery body IDG warns

The price tension has already seen Tesco, burnishing its sharp price cred, get into a rather public price spat with supplier Heinz over beans and ketchup. 

Is Sainsbury's out of fresh ideas? 

Sainsbury's share price reflects its battle not just against German discounters and Tesco and Asda but also the one-hour delivery services, plus Amazon Fresh. 

Mould argues that like-for-like figures are key. 

The pandemic and lockdowns have bent the year-on-year comparisons badly out of shape he says "but in the year to March 2022 like-for-like sales were down 2.3% year-on-year, excluding fuel, and the rate of decline was 5.6% in the fourth quarter alone".

Profits – middling?

Sainsbury’s CEO Simon Roberts thought underlying pre-tax profits for the year to March 2023 would land at between £630m-£690m. 


25.06 Price
-4.370% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 0.14


151.35 Price
-3.270% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 0.11


239.25 Price
-4.530% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 0.14


256.98 Price
+8.980% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 0.51

“That would represent a drop,” says Mould, “from the £730m registered last year when the firm estimated COVID-related volumes added £100m to profits but it would still represent an advance on the £586m generated in the pre-pandemic year of 2019-20.”

Bid talk subdued

Sainsbury has ditched plans to sell its banking arm and bid talk – revived for the umpteenth time after private equity firm Clayton, Dubilier & Rice’s swoop on Morrisons – has come to nothing says the AJ Bell director.

Sainsbury’s financial services arm made £38m profits in fiscal 2022 “and the bank paid its first-ever dividend to the group. Analysts will be watching for any comment here on the loan book and for any signs of any increase in impairments”. 

Especially as customers really feel the cost-of-living burn.

Lower debt, nectar buzz 

However, Sainsbury generates more sales online than it did pre-pandemic which gives it a bit more digital insulation against the likes of Lidl and Aldi, who continue to take market share.

There’s also some customer ‘stickiness’ attached to Sainsbury’s Nectar card (though other supermarkets have their own card schemes). 

Sainsbury’s net debt is down, by around £1.4bn over three years and a 6.3% dividend, 24% up on 2021, is a pension fund and private shareholder show-stopper. 

But the discounters will come in hard over the next 9-12 months. Investors may be tempted to try something new. 

Sainsbury in the aisles

Grocery did solidly in the year to March 2022, with a 7.6% like-for-like increase in sales.

General Merchandise saw a 4.6% drop; Argos was down 3% and Sainsbury’s own stores 12% lower. 

Clothing started healthily but “badly lost momentum as the year wore on, ended with down quarters in Q3 and Q4 and just a 3.1% increase for the year overall,” says AJ Bell.

Updated with files from Reuters.

Markets in this article

2.723 USD
-0.022 -0.820%

Related topics

Rate this article

Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 630,000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading