Sainsbury’s may well be on the road to recovery, but it is not in the clear yet, analysts have warned.
The retailer recently reported a slight increase in like-for-like sales, excluding petrol, of 2.1 per cent, in the six months to October 8. It also posted a slight rise in profits, up from £117 million to £118m.
Gavin Rothwell, senior retail analyst at Verdict Research, said: “The improvements in pricing and availability that it has made in the past 12 months have brought cause for cautious optimism at Sainsbury's, though there is much more work to do.”
He said sales growth is key to the Sainsbury’s recovery programme and three successive quarters of positive like-for-like sales growth have provided impetus, although it had been aided by an influx of former Safeway shoppers, dissatisfied by Morrisons’ store conversions.
Meanwhile, Sainsbury’s chief executive, Justin King, told shareholders the retailer’s turnaround will take at least another 12 months, although he promised it was still on track.
He said: “This time last year, we were talking about protecting Christmas. Now we can set out our stall for a good Christmas.”
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