Sainsbury continues to outperform rival Tesco

As Sainsbury announce Q1 figures, Sheridan Admans, investment research manager at The Share Centre, explains what this means for investors.

"Despite this morning's update from Sainsbury being slightly behind market consensus, the supermarket does seem to be continuing to out perform its rival Tesco on same store performance. Although it should be noted that Sainsbury's results include Jubilee Celebrations, whereas Tesco's Q1 announcement on Monday didn't.

"Total sales for the quarter were up 3.8% excluding fuel, with like for like sales up 1.4% excluding fuel. There is also a continued strong performance from its convenience and online operations.

"Sainsbury has no overseas diversification and is wholly reliant on the fortunes of the UK consumer. This could prove tough for the supermarket as concerns remain that the UK consumer could struggle in 2012 as austerity continues to impact the economy.

"However, investors should note the supermarket has a strong management track record and demonstrated stable sales growth in 2011, which we expect to continue. For income investors already holding the stock, the dividend is currently well covered and they should continue to ‘hold'."