Despite the cost of living crisis, Sainsbury’s has managed to successfully solidify its presence in the UK grocery market by competing with the budget discounters while retaining its premium appeal.

The Nectar card loyalty scheme keeps customers coming back while offering similar prices to Lidl and Aldi. By offering lower prices exclusively to Nectar card holders it doesn’t damage Sainsbury’s brand and enables them to keep its premium image, and charge a premium for many lines. 

This approach has also been adopted by Tesco highlighting the competitive nature of the grocery market currently.

That said, earlier this year, Sainsbury’s announced a plan to hone in on its grocery strategy. Early progress and further detail will be of much interest as full-year results when they are released on Thursday, 25th April. 

“Investors will be keen to see if there is more flesh on the bones on Sainsbury’s three-year strategy unveiled in February which is aimed at offering more food options and consistent value for shoppers. The plan was a little scant on detail, and while the direction of travel, with a doubling down on groceries, is the right way to go, a more in-depth road map would be welcomed to explain how it will be achieved,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“Competition is super tough in the supermarket space, particularly for a mid-market name like Sainsbury’s with cost-of-living pressures meaning it needs to have an ever-sharper eye on offering value. Although it’s succeeded in seizing more market share, that’s put pressure on margins and investors will want to see how long this is likely to continue for.

“Retreating more from home wares and replacing shelf space with more grocery ranges is a big part of the plan, as the grocer takes advantage of customers who are willing to spend more on at home treats. The Taste the Difference range has seen encouraging increases in sales, and investors will want to see that momentum continuing.”

The FTSE 100 was playing catch up with major US indices on Thursday after another weak session over the pond was met by strength in London.

The FTSE 100 was 0.2% higher at the time of writing after the S&P 500 closed in the red for a second day.

London’s weighting towards banks and commodities – and lack of tech – meant it has underperformed the S&P 500, Dow Jones and NASDAQ consistently over the past two years.

However, with interest rate concerns starting to creep back in, US stocks are feeling the pinch as commodity prices rise helping support teh FTSE 100.

“Stickier inflation and a reimagining of the Federal Reserve’s interest rate timelines, together with relatively soft earnings so far this season, means investors have struggled to get too excited across the pond,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.

“This of course comes after five months of very strong gains, so an element of breathing room was to be expected at some point – the question now,of course, is whether this is a pause or a more protracted reaction. The UK market, on the other hand, is being lifted by mining stocks amid higher commodity prices. Iran and Israel tensions are also slightly less heightened than they have been, which should inject some relief into trading.”

Airlines rally

easyJet and IAG were among the top risers with gains of 2.2% and 3.9%, respectively, after strong results from peer United Airlines propelled the stocks higher.

“Yesterday, US airlines enjoyed a tailwind from United Airlines beating expectations and saying business travel demand was picking up. Today, UK airlines have entered the same slipstream as EasyJet’s results get the thumbs-up and International Consolidated Airlines flies right behind.

easyJet was also higher after releasing upbeat first-half trading, revealing a sharp drop in losses.

“easyJet’s best-in-class approach to capacity planning and route discipline has allowed it to be one of the biggest beneficiaries of travel’s renaissance. The budget airline has also upped its capacity by around 8% to meet swelling demand. It’s clear the importance of travel isn’t petering out for consumers, and easyJet has grasped the nettle by backing its holidays business which has paid dividends,” said Lund-Yates.

Easyjet shares were on the rise on Thursday after the airline said most major performance metrics improved in the six months to March 31st.

Passenger numbers were up 8% and ticket yields increased 9%. Losses were much improved despite the disruption caused by the Middle East conflict.

“Disruption in the Middle East has led to a £40mn direct impact for easyJet in the first half. Flying into Israel has been suspended for the summer. In true easyJet fashion, the group’s been able to flex its unexpected capacity to other areas, and has still been able to reduce losses compared to the previous year,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.

Airlines almost always lose money in the winter months and focus on earning profits in the summer. Managing the losses in the winter months and securing strong summer bookings is key to the business model. easyJet has done just that.

Winter losses before tax improved by more than £50m and summer bookings are ahead of last year after a strong Easter trading period.

“Narrowed first-half losses can be chalked up as a result for EasyJet – given the inherent seasonality of holidays means airlines often lose money in the winter months and make up for that over the summer,” said Russ Mould, investment director at AJ Bell.

“True, these figures were somewhat obscured by the timing of Easter but on the flipside the company also took a hit relating to the conflict in the Middle East.

“Consumers still seem to be willing to prioritise travel with the disposable income they have and by boosting capacity and rolling out its package holidays venture, EasyJet has positioned itself to take advantage of this trend.

“At what point people’s willingness and ability to spend money on a week in the sun dries up remains to be seen and this, along with pressures around the industry’s environmental impact, are the obvious clouds on an otherwise sunny horizon for EasyJet.”

easyJet shares were 2.2% higher at the time of writing.

There is a big disconnect between the Centamin share price and the underlying price of gold, which widened on Thursday after the Egypt-focused miner released a soggy Q1 update.

Total gold production for the period fell 1% to 104,821oz, while the grade of open pit mining output dropped 28%.

“Gold miner Centamin has this morning reported gold production volumes and sales were down in the first quarter of 2024 versus Q1 23, however they fully expect production to increase into the year and have reaffirmed 2024 production and cost guidance,” said Mark Crouch, analyst at investment platform eToro.

The blip in Q1 may provide a buying opportunity for gold bugs seeking to gain exposure to the Sukari mine, Egypt’s first large-scale modern gold mine in the Arabian Nubian Shield.

“2024 has seen something of a gold rush, with the metal hitting multiple new all-time highs. Since January, Centamin’s share price has outpaced the price of gold, rising almost 25%, reaching a three-year high, compared with gold’s gains of 15%,” Crouch said.

“Geopolitical instability in the Middle East and Ukraine has almost certainly contributed to gold’s rise, but doubts remain over central banks’ ability to gain a handle on inflation, with CPI in the US rising for the third month in a row in March, casting doubts over rate cuts that were all but a given just a few weeks ago.

“With analysts at CITI this week projecting $3000 gold within the next 18 months, Centamin and their investors look set for a profitable year ahead.”

While Centamin is first and foremost a play on the gold price and continued production at their Egyptian asset, there is the potential upside of an exploration campaign in close proximity to the Sukari mine and developments in Cote d’Ivoire.

Tekcapital portfolio company Innovative Eyewear has announced a material expansion of its global marketing campaign with the appointment of Micah Richards as a brand ambassador for the Lucyd smart eyewear range.

Tekcapital investors will be encouraged by Innovative Eyewears clear intention to grow the Lucyd brand with high-profile personalities as the smart eyewear specialist builds momentum in 2024.

Micah Richards is a former England International and Manchester City footballer who successfully transitioned to a leading pundit appearing on Sky Sports, CBS Sports and BBC Sport. He is also a co-host of “The Rest is Football”, the top ten UK podcast.

“These days, when people are spending more time than ever in front of their phones, TVs and computers, active lifestyle products like Lucyd eyewear are critically important,” Micah Richards said.

“I am excited to partner with Innovative Eyewear to advance a new generation of smart glasses that enhance almost any physical activity with seamless open-ear audio and ChatGPT, all while protecting and correcting your vision.”

The appointment comes as Innovative Eyewear sales rise after launching new ranges and bolstering marketing initiatives as the global adoption of smart eyewear grows. 

In Q4 2023, the company generated more revenue than in the preceding three months and efforts such as today’s announcement promise additional growth in the future.

Nautica powered by Lucyd smart eyewear was launched at the beginning of 2024 and its penetration will be evident in upcoming earnings releases.Reebok and Eddie Bauer smart eywear is due to be launched this year.

The appointment of Micah Richards follows yesterday’s announcement Innovative Eyewear is ramping up retail distribution across the US through a partnership with Windsor Eyes.

Innoavtive Eyewears next earning release will be highly anticipated.

The FTSE 100 was materially higher on Wednesday as Middle East tensions subsided and miners stormed higher and took the index with them.

The mining sector’s strength helped the FTSE 100 0.56% higher at the time of writing.

The move higher in miners today is a delayed response to the better-than-expected Chinese GDP released earlier in the week, which was overshadowed by Middle East tensions.

The top five risers were all miners at the time of writing with Anglo American jumping 3.6% closely followed by Rio Tinto adding 2.9%. Rio Tinto gained despite announcing lower quarterly iron ore shipments and production.

Although the miners were doing most of the FTSE 100’s heavy lifting on Wednesday, the big domestic story was UK inflation falling to 3.2%, and there was evidence of optimism in UK-focused stocks on Wednesday.

“Inflation is moving in the right direction and anyone who has wheeled a trolly around a supermarket over the past few weeks will have noticed that prices aren’t delivering those checkout shocks in the same way they were this time last year,” said Danni Hewson, head of financial analysis at AJ Bell.

“Next month should look even better as the falling energy price cap is finally counted in the numbers, even if many households won’t have noticed much difference to their outgoings as their direct debits remain elevated to pay off outstanding balances.

“But even in this set of figures there are a few troubling issues, notably the stickiness of service sector inflation. This could be exacerbated by the increase in the National Living Wage which is putting pressure on many businesses to hike prices again to balance their books.”

Despite nagging concerns about service inflation, FTSE 100 consumer-facing stocks were higher, with JD Sports up 2%, easyJet gaining 1.9%, and Frasers Group adding 1.6%.

However, gains were kept in check by the fact that inflation was higher than expected, which is likely to do little to encourage the Bank of England to cut rates sooner.

“While inflation is certainly moving in the right direction, it’s still higher than the market expected, which will disappoint those expecting an earlier-than-forecast interest rate cut from the Bank of England,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.