Sainsburys expected to report profit drop as price war impacts margins

Analysts from Barclays have predicted that Sainsburys will have seen their margins fall by a 60 point basis, as the cost of the price war continues to be unveiled.
This will bring the margins down to just 2.5 per cent, and, of course, this will have had an effect on the overall profits of the supermarket chain.
Underlying, pre-tax profit predictions have been reported to expect a slide of 24 per cent. This compares to last year, when in the first six months of 2014, the profits of the store slid by just six per cent to £375 million.
If these predictions are true, this means profits will be down to £284 million this year.
Recently, however, Sainsbury’s hiked its full-year profit expectations to £537 million, after reporting a better than expected 1.1 per cent fall during the second quarter. However, an analyst at Jefferies, a global investment firm, said that the second quarter showed signs for “a more resilient first half than feared”.
This has all come about as a result of the price war, and the big four supermarkets, Tesco, Morrisons, Asda and, of course, Sainsburys cutting corners and prices to try and make sure that their customers remain with them, and to try and attract new customers from each other.