Sainsbury’s has reported a £72m loss but its investment in online and experienced management team will hold the grocer in good stead.

The £72m statutory loss reported by Sainsbury’s this week, its first for a decade, is the latest headline-grabbing figure to illustrate the scale of the structural changes that are battering the grocery sector.

The grocer blamed a £753m charge related to property writedowns on the value of its stores – already set out in its half-year results back in November – for the loss. However, trading was also hit as like-for-like sales dropped 1.9%, and retail sales excluding fuel slipped 0.2%. Excluding the one-off costs, underlying pre-tax profits still fell 1.7% to £681m.

Like all its competitors, Sainsbury’s is confronting a trading environment characterised by deflation, subdued demand, rapid changes to consumer shopping habits and fierce competition.

Sainsbury’s boss Mike Coupe reiterated this week that the UK marketplace is changing faster than at any time in the past 30 years.

However, amid signs that industry volumes are starting once again to expand, and Tesco and Morrisons are beginning to show glimmers of hope, the question will be the extent to which the results illustrate how well-placed Sainsbury’s is to evolve to those changes.

Shore Capital analyst Clive Black, who famously described the grocers as “uninvestable” in March 2014, last month argued the sector was poised to fight back on the back of a better outlook for the industry.

But he argued that Sainsbury’s appeared particularly exposed to recovering competitors.

Coupe has been candid about the short-term challenges Sainsbury’s faces in order to reconfigure the business and the latest results may still not reflect the bottom of the grocer’s downturn.

However, Coupe has also argued that JS is taking the right steps to win in the medium to long term.

Despite Black’s prognosis – and any alarmist headlines around this week’s loss – Sainsbury’s maintains, and appears to be exploiting, important structural advantages over its rivals. These lend credence to Coupe’s assessment of Sainsbury’s prospects. The strong growth in online (up 13%), convenience (up 16%) and general merchandise (up 9%) all testify to that.

The latest Kantar data for the 12 weeks ending April 26 also showed Sainsbury’s outperformed its big four competitors, even thought its market share suffered a slight slip.

And while there has been a focus on price – Coupe believes Sainsbury’s prices have never been better compared with its competitors – Sainsbury’s strength continues to be its differentiated position within the mass market that its values of quality, provenance and sustainability continue to deliver.

But most importantly, Sainsbury’s benefits from a strong, experienced management team – a team not afraid to make changes depending on what the industry throws at it. And as rivals Tesco and Morrisons stage fightbacks, that will stand JS in good stead.

  • Chris Brook-Carter, Editor-in-chief