In two weeks’ time it’s Sainsbury’s turn to update, when the grocer issues its fourth-quarter figures.
As the downturn deepened, bears feared that Sainsbury’s reputation for quality – and sometimes, by unfair association, high prices – would take the shine off the consistently good performance turned in under the leadership of Justin King. But there is no sign that life is souring for JS. The grocer has played a canny game, successfully marrying quality credentials and a value message through initiatives such as Switch and Save and Feed your Family for a Fiver.
While mockney chef Jamie Oliver continues to do a good promotional job on the food front, Sainsbury’s is making much-needed strides in non-food too. Own-brand fashion label Tu’s success has enabled the grocer to claim eighth position by volume in the clothing sector, with a 2.3 per cent share.
The latest TNS data, issued last week, showed JS delivered growth of 5.7 per cent in the 12 weeks to February 22 – a little below the sector total. But over the four weeks to the same date it was up 7.1 per cent. Analysts believe Sainsbury’s has nibbled share from Waitrose and Marks & Spencer, and at the same time has held off the threat of the fast-growing hard discounters.
There’s sometimes grumbling that King, despite all the progress he has made, has not restored Sainsbury’s profits to the level they were at when he took over. But the retailer has been moving ahead consistently and appears to be continuing to do so, in spite of recessionary trading conditions.
Morrisons’ growth levels made it a City darling until the most recent update, which failed to prompt forecast upgrades. Over the past three months Sainsbury’s share price has been the strongest among the food groups. Some analysts believe that if the grocer’s forthcoming numbers impress, the share price will go further still.
Debenhams defies doommongers
Department store group Debenhams’ pre-close update is on Tuesday. Frequently reviled for seemingly never-ending Sales and promotions, the retailer has proved itself one of the most adept at trading through the downturn and has been one of the biggest share price climbers of the past three months.
That’s despite ongoing jitters about debt and is illustrative that, during torrid times, investors will back proven management they can trust.
George MacDonald is deputy editor of Retail Week