Sainsbury’s today reported what it dubbed a “record-breaking Christmas” and recorded a 0.9% uplift in like-for-like sales in the third quarter. The City praised its own label growth but questioned the retailer’s return on investment.

“As expected, third quarter showed a slower level of sales growth, although Sainsbury’s comparable was tougher than its competitors. Therefore, in common with its peers, Sainsbury is failing to deliver a decent return on substantial investment. This needs to change. We expect space growth to slow, investment to shift online and ultimately to see significant and recurring returns of capital to shareholders.

Trade remains tough and is likely to get tougher across the food retailing sector, as rising inflation eats further into consumer’s disposable incomes.” – Philip Dorgan, Panmure Gordon

“To our minds it is common sense to suggest that Sainsbury will be negatively impacted by a recuperating Tesco UK; the overlap across the UK, particularly England and Northern Ireland is considerable. That said it would also be incorrect to our minds to ascribe the success that Sainsbury has had in challenging economic times in driving sustained positive like-for-like sales and market share gains to the fact that its competitors were underperforming.

“Sainsbury has been focused to good effect, delivering strong store standards, innovation, including the surprising effectiveness of Brand Match, and progressive in terms of range development.” – Clive Black, Shore Capital

“After Morrison’s -2.5% like-for-like figure was bang in line, who’d have thought it but Sainsbury’s has also emerged bang in line with expectations, with like-for-like sales up by 0.9% in the extended 14 weeks to January 5. The relentless Sainsbury PR machine boasts of a ‘record breaking Christmas, reflecting 32 consecutive quarters of like-for-like growth’, but if you take out the relatively modest 0.5% benefit from store extensions there wasn’t a lot of like-for-like sales growth, despite strong 15% online growth.” – Nick Bubb, independent analyst

“The grocer’s total performance has inevitably been boosted by continued space expansion; in particular its focus on growing its convenience portfolio and devoting more space to non-food in its larger stores. During this period, Sainsbury’s non-food offer grew at a faster rate than food and, with the grocer being markedly less mature in certain areas comparative to its peers; it has significant scope for further growth here. Moreover, not only is its vast and expanding convenience portfolio helping it to take advantage of consumer trends in core food and grocery, but the utilisation of click-and-collect to fulfil non-food orders across its convenience portfolio is also representing a key competitive advantage to this burgeoning side of its business.” - Joseph Robinson, Conlumino

“Sainsbury’s strength has come from multiple sources: investment in own label ranges (‘by Sainsbury’ sales  rose 5%), a well-executed clothing range (sales up 10%), an established and growing convenience store network (sales up 17%) and an online offer (sales up 15%) with a click-and-collect service at 1,000 stores. Our own survey results show that more and more customers are switching to Sainsbury’s for the majority of their shopping whilst at the same time Sainsbury’s has the highest net promoter score of the big four retailers.” - Caroline Gulliver, Espirito Santo