Sainsbury’s cashes in on Christmas

Wednesday, 11 January: The FTSE 100 index got off to a wobbly start shortly after the open, before surging into the green once more and wobbling once more as Trump took the podium in Trump Towers. Miners, once again proved to be a contributor to the shift higher in the index, with select consumer stocks also playing a part.

One of the risers, Sainsbury’s issued a bullish 3Q trading statement which sent the shares as much as 3.3% higher intraday, before settling c. 1% higher into the close. The acquisition of Home Retail Group, owner of Argos proved to pay off as total sales were 4.1% higher, with like-for-like sales growing 4.0% helped by Black Friday sales and strong Christmas period. Overall sales for the Group were 1.0% higher on a like-for-like basis, aided by a strong Argos performance and a Christmas week in which a record £1bn of sales were made. Early synergies of this match-up have also been realised, perhaps earlier than expected, as the grocer reported higher sales of groceries in supermarkets which contained Argos concessions.

Further evidence came to the fore today that UK exports were on the up, as the ONS reported that the volume of goods exported rose at a three-month rate of 1.1%, up from the previous report which showed a 2.7% decline. Commentators cited this could be behind a rebound in manufacturing output in November, and to this extent the depreciation in sterling is having a positive impact. However, despite this improvement  the overall balance of trade position deteriorated in November as the ONS noted a rise in imports of laptops and tablets from China, along with a rise in transport goods, including ships and railway equipment, from countries outside the European Union. For the month of November the deficit on trading in goods increased to £12.2bn, £2.3bn wider than October.

At the close, European indices were up as the FTSE 100 closed +0.21% , the CAC 40 +0.01% and the DAX 30 +0.54%.

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