ANALYST VIEWS: IS THE GROWTH SEEN AT SAINSBURY’S SUSTAINABLE?

RICHARD HUNTER | HARGREAVES LANSDOWN

Sainsbury is positioning itself for further growth, especially in the areas of convenience stores, online business, and an increasing move into non-food products. On the downside, wider economic uncertainty remains and cheaper selling prices do not always equate to higher profits, since margins are squeezed.

CLIONA LYNCH | VERDICT RESEARCH

Sainsbury's growth in sales has been fuelled largely by expansion, with new space contributing 2.6 per cent to overall growth. Elsewhere trends in top-up shopping are boosting convenience stores with customers buying little and often, while the “Feed your family for £50” campaign is hitting the right note.

CHRISTOPHER HOGBIN | BERNSTEIN RESEARCH

While Sainsbury's increased its full-year dividend by 6.3 per cent to 15.1p – representing a 4.2 per cent yield – investors will likely be concerned that management gave little re-assurance about the dividend outlook. At 12.8 times price to earnings ratio we see better value in the other UK names in our coverage.