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Sainsbury’s (SBRY) has announced a 1.1% like for like retail sales fall, excluding fuel, for the 16 weeks to 24 September 2016.
Total Retail sales were down 0.4% excluding fuel and flat including fuel. That translated to a 1.1% like for like retail sales fall, with overall like for likes including petrol down 0.5%.
Sainsbury’s said that despite the revenue fall it has seen like for like transaction growth and total volume growth.
After the completion of its Home Retail Group acquisition on 2 September, Sainsbury’s announced Argos achieved tots sales growth of 3% in the second quarter to 27 August 2016 and like for like sales growth of 2.3%.
CEO Mike Coupe said: “We continue to make progress against our strategy and, while like-for-like sales were down, driven by food price deflation, we delivered like-for-like transaction growth across all channels and total volume growth. This shows that customers are consistently choosing Sainsbury’s for the choice, quality, value and customer service we offer.
“Our ambition is to help customers live well for less. We have made further investment in everyday low prices and continue to improve the quality of our products. Our general merchandise and clothing offer is popular with customers and the acquisition of Home Retail Group will accelerate our multi-product, multi-channel strategy. We will open 200 new digital collection points by the end of the year and already have 15 Argos Digital stores open in Sainsbury’s stores so customers can shop 90,000 products whenever and wherever they want.
“We expect the market to remain competitive and the effect of the devaluation of sterling remains unclear. However, Sainsbury’s is well positioned to navigate the changing marketplace and we are confident that our strategy will enable us to continue to outperform our major peers.”
Sainsbury’s said it continued to invest in competitive prices “with reductions across more of the everyday products that our customers buy regularly”.
It added that it has now removed “the vast majority” of multi-buy promotions and it continues to reduce our promotional activity in favour of lower, regular prices.
General Merchandise had a good quarter with sales growth of over 4% and its clothing business continuing to gain market share.
Sainsbury’s Bank continued its “good performance” with credit card new business growing 58% year-on-year.
Sainsbury’s shares are currently trending up 0.6% to 252.2p after this morning’s trading update. The shares are 1.5% down year-to-date, but are up 13.6% over the past three months.
Morning update
Consumer products group PZ Cussons (PZC) has released a trading update for the period 1 June 2016 to 27 September 2016 ahead of its AGM today
It said performance during the period “has been in line with expectations” and the financial position of the group remains “strong.
In the UK, performance in the washing and bathing division has been “robust” across its brand portfolio of Imperial Leather, Original Source and Carex as its renovation and innovation strategy is helping to hold or grow market shares in a “competitive trading environment”.
In the beauty division, a poor summer has adversely affected sales of St Tropez in the UK, however sales in the US have been strong.
Asian results are benefiting on translation to sterling as a result of the weaker pound. While in its key African market of Nigeria, following the introduction of the new flexible exchange rate regime in June which led to a 40% devaluation of the naira, there has been some improvement in liquidity although the currency has continued to weaken on both the interbank and secondary markets.
PZ Cussons stated: “The strength of the Group’s brand portfolio and new product pipeline is serving us well and, together with a continued focus on costs, leaves the Group well placed to manage the challenging trading conditions that exist in most markets.”
Elsewhere, Chinese seafood group Aquatic Foods has announced sales decreased by 5.6% to RMB 419m during the six months ended 30 June 2016. However, volumes, particularly in the company’s principal fish products, have increased albeit against lower margins. Profit before tax decreased by 51.3% to RMB 49m .
Palm oil producer REA Holdings announced first half revenues have fallen from $46.2m to $39.3m reflecting lower crop volumes and lower prices. Gross profit increased to $6.1m from $4.7m, but it still made a pre-tax loss of $5.2m (2015: $5.5m) after depreciation of $9m during the period.
Finally, agri-services group Origin Enterprises announced a 4.3% rise in revenues for the full year to 31 July to €1.52bn. Group operating profit fell 14.7% to €67.3m and profit before tax was down 25.7% to €65.5m in a “highly challenging trading environment”.
On the markets this morning, the FTSE is back up 0.8% to 6,861.7pts.
PZ Cussons has jumped 3.1% to 368.8p after this morning’s trading statement. Other risers include Ocado (OCDO), up 4.3% to 264.8p, PayPoint (PAY) up 4% to 1,048p and Hilton Food Group (HFG), up 1.9% to 633p.
Early fallers include C&C Group (CCR), down 2.5% to €3.68, Majestic Wine (WINE), down 1.5% to 312.4p and AG Barr (BAG), down 0.9% to 513.5p.
Yesterday in the City
An initial rally in the FTSE 100 after international market relief the first US presidential debate seemed to make a Donal Trump presidency less likely soon dissipated. The FTSE ended the day down 0.2% at 6,807.7pts to compound Monday’s sell-off.
There was better news yesterday for the grocers though, with the three listed supermarkets amongst the better FTSE 100 performers.
Morrisons (MRW) was up 1% to 218.6p, Sainsbury’s (SBRY) up 0.8% to 250.8p ahead of its trading update this morning and Tesco (TSCO) was up 0.7% to 177.8p.
Other risers included Unilever (ULVR), up 1.1% to 3,640.5p, McColl’s (MCLS), up 2.9% to 175p, Finsbury Food Group (FIF), up 2.4% to 130p and CARR’s Group (CARR) up 2.3% to 153p.
AG Barr (BAG) slipped 0.9% to 518p after announcing plans to cut its workforce by 10% in preparation for the sugar tax as first half revenues fell.
Other fallers included Greggs (GRG), down 0.9% to 1,005p, Britvic (BVIC), down 1% to 611p, Associated British Foods (ABF), down 1% to 2,599p and Marks & Spencer (MKS), down 1.2% to 309.9p
Conviviality was also down 2% to 214.3p and troubled Majestic Wine (WIME) dropped another 2.6% to 317p.
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