Research on the Investment Value of Sainsbury’s

Abstract

This paper provides an analysis and evaluation of the market position and approximate future development of Sainsbury's. Value investing strategy is used to examine if it is a good decision to invest in Sainsbury's. The news about the firm's failed merging with Asda and the effect of Coronavirus and Brexit is analyzed. Additionally, the share price is also discussed, and the reasons why Sainsbury's tends to attract fewer investors currently are explained. The paper finds the prospects of Sainsbury's in its current position, focusing on comparative performance in the area of profit margins, share price, expenses, and so on, particularly. We compared Sainsbury's with Tesco. The profitability of Sainsbury's is not as good as the other. The stock prices of these two companies are almost equivalent. Therefore, we concluded that Sainsbury's is far behind Tesco. Results of data analyzed were shown in this paper, and according to the financial statement, we concluded the current and future development trend of the Sainsbury's. With the macroeconomics theories, it can be found that the UK narrowly missed a recession, yet Sainsbury's still plans to close down part of its stores in order to reduce its cost. Sainsbury's is in a market of oligopoly, with the advantage that other companies can hardly entry. We also did a questionnaire about customers' satisfaction in different supermarkets, and found the ranking compared with other stores like Tesco and ASDA. In addition, we discussed the development of online stores during the pandemic which may attract customers in the future, leading to a further decline in traditional supermarket brand's market share unless they adapt.