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The aim of this report to analyse J Sainsbury’s plc (Sainsbury’s) and its main competitors. In this report, we will be investigating the share price of the firm and also the movements of share prices for its competitors. Sainsbury's is a well-established popular UK based supermarket. To compare Sainsbury's to its competitors we have selected two firms: Tesco plc (Tesco), the current market share leader in the UK and; WM Morrison plc (Morrison), a relatively small national supermarket chain. The methodology of comparing share price movements is through rebasing process. This report analyse events in between the study period from 1st October 2012 to 22nd March 2013 that resulted in significant share price movements. This period includes the busy festive period of Christmas as well as New Year where supermarkets often experience big increases in sales. But it also includes the post New Year drop in sales where households attempt to recover financially from the costly Christmas period. FTSE 100 is also been used in this report to compare with the performance of Sainsbury’s as well as it competitors. The index is used because it reflects the performance of major quoted companies in the UK (Hatcher, 2007).

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Graph 1: J Sainsbury plc share price over the study period

Graph 3: Tesco share price over the study period

Jennifer from Bloomberg described on 15th of November 2012 how UK Retail Sales dropped more than forecasted (Ryan, 2013) . This ties in with the significant drop shown on the 1st graph between the 2nd of November and the 20th. The expected decline in sales of food, which accounts for 41% of retail sales was expected to be 0.1 when in reality it turned out to be 0.6. This may help to explain the significant drop from 349 on the 12th of November to 329.20 on the 21st. Later on the same article it describes how inflation increased driven by university tuition fees thus explaining a drop in sales and the overall stock price due to higher prices.

Graph 5 Morrison share price over the study period

A news article from the 10th of January Focuses on the rise of UK Stocks following the festive period. Financial analyst Sara Sjolin (2013) analysed how Sainsbury's stock price fell following the bank HSBC cutting it from neutral to underweight. This essentially means that there is "a situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's weight in the underlying benchmark portfolio". In other words the bank was concerned regarding the performance of the supermarket. During this time however competitors such as Tesco saw an increase (shown on the above graph). These effects are thought to be in part brought about by the effect of the Bank Of England keeping the base rate at 0.5%. In theory increasing spending and decreasing saving.

Graph 2: Share price of all three supermarkets and FTSE100 rebased on the 1st October 2012
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In terms of market share, Sainsbury's ranks third amongst the other supermarkets in the UK (GN, 2013). Its current market share is 17.0%, behind ASDA with 17.7% and Tesco, the market leader on 29.7%. This survey was finalised on the 17th of February 2013 and takes into account past data and other competitors.

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Prior to the official announcement of Morrison, investors had already expected a poor sale figure for the fourth quarter of 2012. Share prices of Morrison did not fluctuated rapidly after the Chief Executive of Morrison has revealed a poor 2012 Christmas sales at the beginning January 2013 (BBC, 2013). By contrast, Sainsburys announced a better sales figure. They performed better than what they expected during the festive sales (TheGuardian, 2013). As a result, the rise in share prices after the early January announcement has reflected the positive perspective of the investors towards Sainsburys.

İngilizler, iğneli keçe atölyesinde Türk geleneksel sanatlarının örneklerini öğrenecek.

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During the study period, there was a "horse meat scandal" which could be tracked back from the meat sold by Tesco. In January 2013, the guardian (2013) reported that Tesco’s Everyday Value Beef Burger contained horse meat after a DNA test. It causes the sharp drop for customer’s trust and confidence, the bad news has made the share price 3.6p lower to 346p, market value has wiped by 300 million pounds, and also suffered the heaviest fallers on the FTSE 100. (Yahoo! Finance (a), 2013)