Sainsbury's finance boss says discounters could double market share by 2020

Speaking at an investor lunch hosted by Shore Capital, Rogers was confident in the outlook for Sainsbury’s in a tough food retail environment but flagged the likelihood of value specialists’ continued strong growth.

Shore Capital analysts Darren Shirley and Clive Black said in a note: “Mr Rogers painted a positive picture and was pretty optimistic about Sainsbury’s prospects.

“Such prospects were set in a context whereby he believes the discount channel could gain circa 1% market share per annum for the remainder of the decade – so circa 15% share from the current 8%.

“Additionally, he did concede that if any of the more value-oriented majors decided to take materially assertive pricing action then Sainsbury could not stand on the sidelines and ignore such a change, whilst also noting a differentiation in its proposition relative to the other big four players.”

Sainsbury’s has done better than its main rivals for some time, even as the discounters have grown.

Shore’s analysts believed that would continue.

They said: “We believe that Sainsbury can continue to outperform its big four peers supported by an improving economy, an exposure to London and the South East and a more affluent customer base.

“We are relaxed about Sainsbury’s ability to withstand any negative impact from Tesco’s refurbishment, though we note the potential iceberg of an industry-wide price attack on the discounters.”