The Bluffer's guide: Sainsbury

Your essential companion to this week's big events

Age:

127 years.

Place of birth:

Drury Lane, London.

Occupation:

Supermarket chain.

Everyone's favourite ingredient, right?

Well, actually no, not any more. Throughout the 1980s Sainsbury was unassailable but Tesco has recently overtaken it in market share and its shares are hugely outperforming Sainsbury's.

What's gone wrong?

What hasn't? It lost out to Tesco in a bidding war for William Low, the Scottish supermarket chain. It has been outmanoeuvred on the marketing front by Tesco's highly successful loyalty card.

Its stores look dowdy and uninteresting. It over-emphasised its own-label products at the expense of blue-chip brands. And it seems to have lost its value-for-money image.

But what about Delia?

Sorry, but not even Delia Smith, the superstar TV cook who appears in in-store promotions and in the Sainsbury magazine, has been able to stem the decline.

In January Sainsbury was forced to issue a profits warning and retail watchers expect a lousy set of annual results this Wednesday.

How lousy?

Pre-tax profits down from pounds 808m to pounds 750m, underlying sales volumes shrinking by 1.5 per cent and - horror of horrors - the final dividend held at 11.5p.

Shareholders can't remember the last time the dividend was held.

Whose fault is it?

Times are tough in food retailing. The days of aggressive expansion through out-of-town superstores are over.

But whose fault is it?

Everyone's feeling the pinch. Last week Kwik-Save, another star of the 1970s and 1980s, reported horrendous results and was forced to call in consultants from Arthur Andersen for ideas on how to reverse its worrying decline.

Yes, yes, but whose fault is it?

All right, all right. The share price decline almost exactly coincides with the appointment of David Sainsbury, who took over from his cousin, John, as chairman and chief executive in November 1992. Some analysts are beginning to worry that David is not half the grocer John was.

Will he get the push then?

Unlikely. Sainsbury, by most measures, is still a very well-run business. Plus David owns more than 20 per cent of the shares and the wider family controls 40 per cent.

He has relinquished the chief executive role, pulling back from the day- to-day running of the business.

Dino Adriano, chief executive designate of the UK supermarkets, is the coming man. Expect him to be the focus of questioning on Wednesday.

TOMORROW

Bank holiday.

TUESDAY

Interims: British Petroleum (Q1), Neilson Cobbold Holdings, Stratagem Group.

Finals: Chiroscience Group.

WEDNESDAY

Statistics: CBI/BSL quarterly regional trends survey, monthly monetary meeting.

Interims: Avon Rubber, Holmes & Marchants, Royal Bank of Scotland, Tate & Lyle.

Finals: Beattie (James), DCC, Nynex Cablecomms, Whitbread.

THURSDAY

Statistics: March index of production.

Interims: Capital Radio, Royal Dutch/Shell (Q1), Sidlaw, Tomkinson, Vaux Group.

Finals: Scottish Power, Silentnight Holdings, Warner Howard, Prowting.

FRIDAY

Statistics: CBI April monthly distributive trades, April cyclical indicators.

Finals: Audax Properties, Hawtel Whiting Holdings.

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