Sainsbury’s tasting the difference with increased profits

Graham Spooner, investment advisor at The Share Centre explains why Sainsbury's remains a ‘hold' for investors even though the supermarket outperformed Tesco in like for like sales.

"News that Sainsbury's has outperformed market leader Tesco with a 2% increase in like for like sales - excluding petrol - for the six months ending 31 August 2010, is positive for the supermarket and investors alike.

"Sainsbury's focus on non food lines, such as clothes and electrical goods - which is growing at three times the rate of it food division - coupled with the re-launch of their Taste the Difference range of premium food, has ensured that figures are boosted.

"However, despite these positive results we continue to list Sainsbury's as a ‘hold' and urge investors who are new to the sector to take a look at our preferred supermarket, Tesco. Their overseas exposure means investors face wider opportunities for growth."