Sainsbury’s third quarter: What the analysts say

“We should praise the company for cranking out this performance, sustaining Mr King’s track record of positive like-for-like sales, against what is clearly a challenging and competitive environment. The competitive heat in 2014 can be expected to go up a gear as the hard discounters in particular are given less of a ‘free-run’ by what we deem to have been collectively sleep-walking and somewhat complacent and promotional intoxicated superstore operators.” - Clive Black, Shore Capital

“Sainsbury’s third quarter sales show that the company is still outperforming the wider UK grocery market despite lower food price inflation, more competitor discounting and a weaker grocery industry growth rate across the third quarter.

“We believe Sainsbury’s new value simplicity pricing strategy and a simplified category assortment plan has increased average selling prices year on year in the third quarter and may have helped contribute to a better than expected sales growth and we believe trading margin in the second half.” - Mike Dennis, Cantor

“The ebullient chief executive Justin King will find much to be ebullient about in the way that the business coped with that late Christmas surge, but the bears will note that although there was no benefit from store extensions in the LFL outcome it was still boosted by the strong growth in convenience stores and online, i.e. core Sainsbury’s supermarkets were down like-for-like.” - Nick Bubb, independent analyst

“We think Sainsbury’s is the best placed of the UK food retailers, and the third quarter trading statement is encouragingly towards the upper end of market expectations. It is our favourite of the three grocery stocks, although our caution on the short-term sector outlook as a whole holds us back from having a more positive recommendation at the moment.” - Graham Jones, Panmure Gordon