Financial Analysis of Sainsbury's Performance

Sainsburys is currently the second largest chain of supermarkets within the UK, with a current supermarket sector share of 16.9%. Sainsbury’s was founded in 1869 and today operates in over 1,200 supermarket and convenience stores, and has over 161,000 employees. We will be looking at a number of areas internally and externally and see how they are effectively or not effectively performing.

The Dividend Payout Ratio shows Sainsbury’s holding quite a consistent return for shareholders. Indeed citing a 5.27% increase on 2012/2013 to 50.16 (2013). These were reduced by 10.91% by the 2013/2014 trading period, closing at 44.69. Similarly Tesco Dividend Payout Ratio figures suggest a level period from 2009 – 2012 at 41.93. The ratio figure rose exponentially, by 2253.11% to 986.66 by 2013, due largely to the huge 95.74% reduction in profit for the year of just £120M. Evidence that the situation is recovering somewhat is the published increase in profit of 708.33% to close at £970M in 2013. Further subsequent reductions in the 2013/2014 period of 87.58% closes with the ratio specified

Sainsbury’s goal is to reflect they commitment to meeting customers’ needs; however, they want to shop food, clothing, general merchandise and services also they vision is to be trusted retailer where people love to work and shop. They strategy plan is to know they consumers better than anyone else, be there for them whenever they need them also offering great products and services at fair prices. They colleagues make the difference; they value makes them different.

Owners- Sainsbury’s have shareholders in the form of stakeholders. Owners are one of the most important stakeholders. They want their business to expand and earn as much profit as they can. Owners aim to make money and raise the business they have shares in. They buy and sell their shares in order to see their share of profit increasing.

Sainsbury’s incentives are in making lives easier by delivering fair prices and quality services; for example, their focus on location has led to growth in both convenience and discount stores. J Sainsbury plc (2015) Strategic Report is divided into two sections; the non-financial KPIs are: Product Quality, Like-for-Like Transactions, Price Perception, Sales Growth and Service Growth, Availability and Customer Service that focuses on social responsibility. Fredrick (1960) agrees in taking opportunities to fulfil the needs of stakeholders where means of production should be employed efficiently enhancing the socio-economic welfare that increases strategies on financial KPIs following: Underlying Profit before Tax, Earnings per Share, Cost Savings,

Sainsbury’s was founded in London in 1869 as one of the nations’ oldest retailers. It also provides a unique illustration of transformation that has occurred in retailing and in shopping and eating habits since the mid-19th century. It grew to become the largest grocery retailer in 1922, pioneered self-service retailing in the UK, and had its heyday during the 1980s. Now it is the third largest chain of supermarket in the United Kingdom with a share if the UK supermarket sector of 16.3%. The supermarket chain operates three store formats: regular Sainsbury’s store (“Main Mission”), Sainsbury’s Local and Sainsbury’s Central (convenience stores and smaller supermarkets in urban locations—“Mixed Mission”) and

John James Sainsbury and his wife Mary Ann Sainsbury opened first Sainsbury’s store in 1869, and since then the company

The Organizational and Business Background At the point when one discusses retail chain stores and United Kingdom grocery stores, the commonest name that comes into psyche is Sainsbury's. Built up in the nineteenth century, and all the more particularly 1869, Sainsbury's is one of the main multinational store and retail chain shops working both in the United Kingdom and in the United States (Reference for Business, 2015). The organization characteristics its development and introductory development to its originators, John James Sainsbury close by his wife Mary Ann, with the first central command at London. It is beneficial taking note of that the association bargains in a wide assortment of business lines beginning with general stores chains,

Over the past 12 months, from the 29th December to 28th December 2013, Greggs plc have had many difficulties that range from market competitiveness to profit warnings. This report will identify those key difficulties that cause many issues for Greggs plc within that period. Ultimately, this report will review the prospects of Greggs plc and whether we should continue with maintaining Greggs plc or possible dropping them from our portfolio.

Tesco is a British retail magnate trading at the London Securities Exchange. The company had several capital and quasi-capital transactions with providers of finance during the fiscal year 2008; had the effect of altering their capital structure and changing their Weighted Average Cost of Capital. During this financial year, Tesco was financed by retained profits, long and medium-term debts, capital market issues, commercial papers, bank borrowings and leases (Tesco PLC, 2012). The company generated £2611m cash from operating activities which helped finance their £3bn in capital expenditure, including £1899m profit which contributed towards retained earnings. The firm issued Medium-Term Notes (MTNs) worth £1213m which helped decrease the current MTNs, overdrafts and loans by £108m. Additionally, ordinary shares totaling £156m were released by the firm and entered into the sale-and-lease back leasing arrangements that released £454m from property, along with £650m after the balance sheet date. In addition, the firm returned value to shareholders by paying dividends of £467m and purchasing £490m of their own shares back.

And the quick ratio3 indicates the company’s ability to repay immediate commitments using cash or near-cash assets4. From the trend analysis5, the short-term liquidity level as measured in current ratio of Sainsbury has decreased significantly amid the financial crisis, resulting 0.66(2008) and 0.54(2009) respectively. It may be because those current liabilities are rising faster than current assets, or the firms investing substantial amount of its liquid assets (e.g. cash) into long-term investment, resulting a decrease in the above two liquidity ratios continuously from 2008 to 2009. Moreover, adverse trading conditions in recession may cause inventory becoming obsolete or introduction of new models by competitors. Nevertheless, as the UK economy has dragged out from recession steadily from 2010, current ratio has improved, reaching at 0.66 and is closed to the industrial benchmark Tesco at 0.69. Present quick ratio of Sainsbury is 0.38, which has improved from

Sainsbury has had a long history of business success, something that it can continue for the foreseeable future if it maintains a cohesive business strategy, a strategy that is rooted in a larger cohesive corporate vision. This paper examines some of the key factors that the company must consider to be the foundation for a prosperous and profitable future. This analysis demonstrates that Sainsbury's executives understand that not only does the company have to plan and then put into effect good initiatives and good policies, but they have to sell the company's image as one that its customers want to share. Sainsbury's sells itself successfully by (also successfully) selling itself as a representative and purveyor of British values.

Sainsbury 's has a piece of the overall industry of 14.9% in 2007, relentlessly expanding since its rebuilding program that began in 2004 (Annual Report 2007). This is a positive pattern however it lingers well behind the runaway business sector pioneer Tesco, demonstrating that there is significant separation to cover.

Ratio analysis where evaluated to identify any possible potential investment in Tesco PLC by means of buying company shares. The result of a successful investment would be attributed from either an increase in the share price or by regular dividends distributed to the shareholders. In order to perform a consistent analysis, ratio analysis were as well compared with Sainsbury PLC, and Morrison PLC. Moreover, to perform an improved and more

Tesco was founded in 1919 by Jack Cohen from a market stall selling surplus groceries in London’s East End. The company is now not only a grocery but also a general merchandise retailer who operates in 12 countries around the world, employs over 530,000 people and serves tens of millions of customers every week. Tesco became a private limited company in 1932 and in 1947 Tesco Stores (Holdings) Ltd floated on the stock exchange with a share price of 25p. Tesco’s aggressive negotiation with suppliers helped it grow its market share from 7% in 1971 to 31% in 2007 making them the UK’s top supermarket. Despite being in a recession, Tesco made record profits for a British retailer in the year to February 2010, during which it’s underlying pre-tax profits increased by 10.1% to £3.4 billion. It is currently listed on the FTSE 100 Index meaning that they are within the top 100 yielding companies listed on the London stock exchange but things have taken a turn for the worst for Tesco.