Sainsbury’s and its takeover target Home Retail Group will update on recent trading this week, while WPP shareholders will have their say on boss Sir Martin Sorrell’s £70 million pay package.
Sainsbury’s posts first quarter figures on Wednesday at a testing time for the chain as its £1.4 billion takeover of Home Retail Group faces scrutiny from the competition watchdog and amid signs that sales are flagging.
Boss Mike Coupe is expected to reveal that its recent move to scrap “buy one get one free” offers has dented trading after industry data revealed its worst sales performance for nearly a year.
Figures from Kantar Worldpanel revealed that Sainsbury’s saw sales drop by 1.2% in the 12 weeks to May 22, pushing its market share down to 16.2% from 16.5% a year earlier.
It came after a change in promotional strategy at the chain, which has also ditched its brand-match guarantee in favour of overall lower prices.
Sainsbury’s was outperformed by market leader Tesco, which saw its share rise after two years of declines, to 28.6% from 28.3% a year earlier, as it saw the smallest sales decline of the Big Four players, down 1%.
The disappointing Kantar figures followed less than a week after the Competition and Markets Authority (CMA) said it was looking into whether the tie-up with Argos owner Home Retail could result in a “substantial lessening of competition”.
It will consider comments on the deal and decide whether to launch an inquiry by July 25 in a move that could jeopardise the Argos takeover.
Home Retail has had an eventful past few months, selling off its DIY chain Homebase to Australian conglomerate Wesfarmers for £340 million in February and agreeing a £1.4 billion takeover by Sainsbury’s just a month later.
If the Sainsbury’s deal goes ahead, Home Retail group CEO John Walden could cash in more than £5 million in cash and shares, according to the Home Retail annual report.