Sainsbury’s shares have slumped to their lowest in more than a year as fears swept the City that the grocer had a disappointing Christmas.
Although the retailer is expected to post seasonal like-for-like growth when it updates on Thursday, there are worries that it will fail to equal the performance of rivals such as Tesco and Morrisons.
Blue Oar Securities analyst Greg Lawless told investors: “Our sources suggest that Sainsbury’s has underperformed the market this Christmas and missed internal sales and profit targets.”
He said a shopper shift away from Sainsbury’s, promotions which may have eroded gross margins and higher than expected wastage of fresh products could potentially create a “profit hole”, which the grocer would have to try and address in its fourth quarter.
Sainsbury’s lost almost 6 per cent of its value this morning as its shares slid 22.5p to 383p.
Sector bellwether Marks & Spencer’s shares also fell this morning as gloomy brokers raised the prospect that its update, scheduled for Wednesday, will also be disappointing. They warned that sales of food in particular were weak over Christmas.
Since last Thursday, when electricals giant DSGi issued a shock profit warning, fears have grown that this festive period will have claimed more big retail scalps.
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