On the face of it, this is a gloomy update amidst an increasingly difficult market: a further deterioration in trading for the main store estate, a dip in profitability and fixing the dividend cover. The establishment of a war-chest to fund price investment might help mitigate some advances by the German discounters, but we are fearful that it nullifies only one of the discounters’ advantages: price.

What it does not address is that the discounters are also winning because they are quick to shop and easy to understand, the latter not a quality immediately apparent in Sainsbury’s recent marketing endeavours. Concerns remain that Sainsbury’s will be first in the firing line when the sleeping giant Tesco reawakens in 2015, adding further pressure to Sainsbury’s already relatively scrawny margins.

Sainsbury’s has some very clear strengths in areas like quality, service, provenance and in-store execution, but playing to these strengths is clearly no longer enough. Its realistic assessment of its store portfolio is refreshing: we await with interest to see next steps on repurposing excess space.

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