Sector movers: Sainsbury drags grocers lower amid gloomy Kantar data

7th May 2014 14:55

A mixed reaction to better-than-expected results from J Sainsbury and gloomy industry data pushed grocery stocks lower on Wednesday.Underlying profit before tax at Sainsbury rose 5.3% to £798m in the 52 weeks to March 15th, ahead of the consensus forecast of £782m, on underlying group sales including fuel up 2.8% to £26.35bn. However, the stock was down 3% at 323.29p in afternoon trade.Analysts at Shore Capital admitted that results beat their own estimates but said that share price upside is "limited" despite undemanding valuation multiples.Tesco and online food retailer Ocado were both trading with heavy losses today, along with WM Morrison after the stock went ex-dividend.What's more, Sainsbury's Chief Executive Justin King, who is leaving the company after 10 years, gave a cautious outlook for the industry.He said: "While the general economic outlook is showing some signs of improvement, conditions in the food retail sector are likely to remain challenging for the foreseeable future as customers continue to spend cautiously."In a similar vein, fresh supermarket industry data from Kantar Worldpanel showed growth is at the "lowest level for at least 11 years".Figures for the 12 weeks ending April 27th show the British grocery market grew just 1.9%, which Kantar said was caused by intensifying price competition among the supermarkets and a resulting drop in price inflation. Among the big four, Asda has proved the most resilient in holding onto market share, but Tesco, Sainsbury and WM Morrison all suffered shares declines."There are clear signs that the major supermarkets are reviewing their strategies in the face of increasing competition," said Kantar Director Ed Garner. "We're now seeing the big four moving away from 'here today, gone tomorrow' promotions and toward everyday low prices - with Tesco, Morrisons and Asda all announcing price cuts this month."Top performing sectors so far todayForestry & Paper 10,835.99 +2.13%Tobacco 38,566.25 +0.94%Mobile Telecommunications 5,071.86 +0.93%Media 6,030.35 +0.58%Health Care Equipment & Services 5,160.76 +0.48%Bottom performing sectors so far todayConstruction & Materials 4,459.35 -2.48%Food & Drug Retailers 3,706.48 -1.71%Banks 4,432.53 -1.26%Oil Equipment, Services & Distribution 25,275.33 -0.90%Support Services 6,500.95 -0.82%BC