Proactive Investors - Sainsbury's (LON:SBRY) finds itself releasing full-year results just as the spotlight has become firmly fixed on how much money supermarkets are making out of inflation.
Tesco (LON:TSCO) was accused of making an ‘obscene profit’ just a week ago and Barclays expects Sainsbury’s to report £685mln or just short of the top end of guidance issued in January.
Barclays predicts the grocer will forecast a fall to £650mln in the current year, which might deflect some of the criticism, but a key ratio to watch for is gross margin as it will give a clue on just how much food price inflation is being passed to customers.
Sainsbury’s recently matched Tesco’s decision to cut milk prices, but with the latest Which? survey showing that the price of the low-fat variety was up almost 40% over twelve months, this might just be a bit of sensible PR.
Shares are up 75% since last October, suggesting investors are happy enough with the current situation.