In what is an increasingly circumscribed market, FTSE 100 retailer Sainsbury’s (LSE: SBRY) is making impressive progress, and in the last year (until February) he provided the largest augment in market share for over 10 years.

Sales increased by 4.2%, i.e. 3.2% in a similar form, reflecting what, according to its chief director, is “The winning combination of values, quality and services that customers love“

The second largest supermarket in Great Britain plans to utilize its last progress, after purchasing 14 modern pages with supermarkets to expand store assets. Market conditions are tough, but huge investments of a grocery store in prices, products and the power of pulling the nectar loyalty program still attract even more players.

Reflecting his last successes, Sainsbury’s has noted an augment in share prices by 10.1% over the past year. But can the Footie grocery store continue its solid shoots? I’m not so sure.

Competitive pressure

As I say, the company operated solidly in the environment of bloody competition. The question is whether it can continue to do it, because the Aldi and Lidl values ​​chains are growing their possessions, his rivals open the swaths of modern multi -branch stores, and a colleague of the “Big Four” operator, ASDA, begins a bruised modern price war.

Reflecting this pressure, Sainsbury’s said he was expecting an annual operational profit to Flatline for £ 1.1 billion this year.

Like his rivals, Sainsbury’s can still discount strongly to defend himself in the online store and sales volume. But this can bring a catastrophic cost to its already gaunt retail margins (this was 3.17% in the 2025 tax year based on basic operations).

Other threats

Pressure for a retailer to reduce prices is particularly great because the crisis of living costs is underway. And unfortunately some economists suggest that the strength of consumer expenditure may remain delicate for the rest of the decade, if not longer.

According to the Think-Tank Resolution Foundation, typical household income will augment by only 1% between 2025 and 2030, and for the lowest earnings of households, income will fall by the same percentage in five years.

Particularly worrying is that Outlook about Sainsbury’s, taking into account its huge division of Argos goods, which is more exposed to consumer conditions than retail food.

As if it was not enough, food retailers are also exposed to the danger of sales, because slimming stabs, such as ozempic, are becoming more and more popular, limiting the demand for sweet treats and other guilty pleasures.

According to Kantar Worldpanel, about 4% of British households now utilize such drugs.

But as the retail and consumer head says in the company: “This is almost twice as much as last year, so although it is still quite low, it is definitely a trend that the industry should have an eye for, because these drugs can potentially control the elections in Till“.

Buyer beware

I do not believe that these risk is currently reflected in the valuation of Sainsbury. After these last price increases, they trade in a forward price (P/E) with about 13 times, which is higher than the FTSE 100 average.

As a result, I think that investors should consider buying other rush actions.