THE INVESTMENT COLUMN : Sainsbury checks out new goals
There is little doubt over Sainsbury's position as a profits machine. Profits for the year to March rose by 10.5 per cent to £809m on sales that improved by 7.5 per cent to £12bn, making it Britain's largest retailer.
What seems to have happened is that Tesco has stolen the high ground as far as innovations and derring-do are concerned. Its Tesco Metro format has proved popular and its loyalty card, launched only weeks ago, already has more than five million subscribers.
Sainsbury is currently adopting a more cautious strategy in the newly restricted retailing world where the supermarket giants can no longer open out-of-town superstores at the rate of one a week. While Tesco has expanded into smaller, city-centre stores and taken the battle to Europe, Sainsbury is concentrating on squeezing higher profits from what it already has while expanding its interests in the US.
It will only open 12 new UK superstores this year but will modernise 82. Another 19 are begin extended and will be the first to have upmarket meat and fish counters selling Aberdeen Angus and swordfish. In the last three years, the range at a typical Sainsbury supermarket has expanded from 16,000 lines to 19,000.
While Tesco is expanding in Europe with interests in France and Hungary, Sainsbury is keenly pursuing the American dream of buying into a regional chain and expanding it. Shaw's and Giant, in which Sainsbury acquired a minority stake last November, are both doing well. Mr Sainsbury, however, says he has no plans to buy up the rest of Giant.
It also has another string to its bow with the DIY businesses of Homebase and the recently acquired Texas Homecare.
Such diversifications are all very well but it is UK supermarkets which still account for the lion's share of profits, so the City will be looking for some new ideas. UBS is forecasting pre-tax profits for next year of £890m, which on yesterday's closing price of 430p puts the shares on a forward p/e of 13.6, a slight premium to the market. In the short term, few fireworks can be expected.
Kirstie Allsopp has waded into the female fertility debate again
Gillian Anderson lays into gender disparity in Hollywood
The Sistine Chapel is set to be illuminated with thousands of LEDs
- 1 Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
- 2 Prince held a Facebook Q&A and this is the only question he answered...
- 3 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 4 35,000 walrus gather on north-west Alaska beach 'for a rest'
- 5 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
Prince held a Facebook Q&A and this is the only question he answered...
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
Brad Pitt, on the moment he completely lost his temper with Clint Eastwood's son
Jennifer Lawrence nude photos leak: More celebrities allegedly targeted as third wave of hacked images released
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Former Tory donor Arron Banks ups his Ukip donation to £1million following William Hague 'nobody' comment
Mark Reckless becomes second Tory MP to defect to Ukip in a month
Should gay sex be illegal? 16% of Britons think so
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...