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Sainsbury (J) PLC SBRY Stock Quote

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Morningstar‘s Stock Analysis SBRY

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Sainsbury's Is Well Positioned to Regain Momentum Through Online and Better Value Perception

Ioannis Pontikis, CFA Senior Equity Analyst

Business Strategy and Outlook

| Ioannis Pontikis, CFA |

While Sainsbury’s has historically distinguished itself from its peers with a higher-quality (premium-priced) food offering, it has been underperforming peers due to a lack of focus and responsiveness to an increasingly value-orientated U.K. consumer base. After the rejection of Sainsbury's proposed merger with Asda, the supermarket is in need of a turnaround strategy to regain market share and improve its price position versus competition. Our thesis after the rejections had been that Sainsbury’s could still regain competitiveness and we saw multiple paths ahead. First, through a new partnership/merger with a smaller grocer in the U.K., which could generate the necessary cost savings to invest back in prices. Alternatively, the group could proceed to a 2015 Tesco-like restructuring through an aggressive reassessment of the structural costs of its business. Sainsbury's recent restructuring plans confirmed the latter.

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Key Statistics SBRY

Company Profile SBRY

Business Description

Founded in 1869, Sainsbury's is the second-largest U.K. grocery chain with 15% market share. It operates over 600 supermarkets and 800 convenience stores, all in the U.K. The company has diversified away from core food by selling clothing, telecom equipment, and other nonfood items. In September 2016, it took a step further into nonfood retailing with the purchase of Home Retail Group, operating the Habitat and Argos chains (general merchandise and electronics stores), for GBP 1.10 billion. It has been selling products online since 1997.

33 Holborn
London, EC1N 2HT, United Kingdom
T +44 2076956000
Industry Grocery Stores
Most Recent Earnings
Fiscal Year End Mar 4, 2023
Employees 171,000

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