J Sainsbury PLC (LSE:SBRY) offers the largest scope for surprise as it joins several large retailers gearing up to update on third-quarter trading next week, Barclays analysts said.
Though reporting alongside Tesco PLC (LSE:TSCO), Marks and Spencer Group PLC (LSE:MKS) and B&M European Value Retail SA (LSE:BME), recent Kantar data suggests it is Sainsbury’s which is most likely to outdo existing estimates, the bank said in a research note on Thursday.
“Sainsbury might be best placed to positively surprise on sales and to revise guidance upwards,” Barclays wrote.
According to Kantar, sales at Sainsbury’s in the month to 24 December 2023 grew by 9.3% compared to the year before, as the sector as a whole enjoyed a festive boost.
This compares to Barclays’ expectation that Sainsbury’s will report total grocery sales growth of 8.0% over the third-quarter - which would mark a fall on previous quarters.
“This would arguably still represent a very good outcome, given the backdrop of tough competition and declining food inflation,” Barlcays said.
Kantar’s data also found Sainsbury’s had grown its share of the UK grocery market to 15.8% in the run up to Christmas, which Barclays noted followed the retailer’s largest gains for a decade in November.
“Its growth rate remains robust,” the bank added. “We think the recent Kantar data implies some degree of upside risk to our estimates.”