A mixed fourth quarter trading statement from Sainsbury’s (SBRY) was saved by a forecast-beating performance from recently-acquired Argos.

Like-for-like retail sales softened 0.5% in the core supermarkets business; in contrast Argos achieved 4.3% growth.

Argos’ online strength and delivery skills could boost Sainsbury’s general merchandise sales and help it battle Amazon and others.

Chief executive Mike Coupe, who has staked his reputation on buying Argos, has been quoted as saying the integration is a case of ‘so far, so good’. A further update on progress is expected with Sainsbury’s full year results on 3 May.

The market is positive on Sainsbury’s despite its mixed performance and tough competitive landscape. Its shares are up 10% so far this year.

Our view is that competitive pressures will remain a key challenge for the business.

The performance of Tesco (TSCO) is strengthening; WM Morrison Supermarkets (MRW) has returned to like-for-like growth; Aldi and Lidl aren’t going away and Asda is picking itself up off the floor. (JC)

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