J Sainsbury PLC (LSE:SBRY) has been identified as a clear loser from the raft of tax-raising measures announced in the Budget.
National Insurance hikes and higher minimum wage levels hit it directly, though it is unlikely Sainsbury’s rates are anywhere near the minimum given the competition for good grocery staff.
Add in steady food deflation for months and next week’s interim results update looks set to be the trickiest for some time.
Market share gains have helped volumes but competing with Aldi and Lidl comes at a price.
“Just how much of an impact this investment in low prices is having on profitability is something to be viewed with interest,” notes wealth platform Hargreaves Lansdown.
Investors are clearly getting nervous with the share price down around 12% since September.
Barclays predicts second-quarter like-for-like retail sales growth of 4.4% ex-fuel, up from 3.0% in th first quarter.
Interim group revenues should be £17.4 billion, says the UK bank, with retail underlying profits of £525 million (vs cons £516m).
"We expect key elements of guidance to be reiterated. Sentiment mixed with general merchandise (Argos) taking the shine off strong core grocery."
--adds Barclays comments--