London - Sainsbury's might have reported a 2 percent fall in sales, but its shares were flying off the stock market's shelves.
Investors are getting a sniff of something that's been hard to detect in the bouquets of any of the players in this embattled sector for quite some time: hope.
While sales might have been down at the headline level, that is more or less to be expected at a time of still quite sharp price deflation, requiring grocers to run ever faster just to stand still.
They were at least a shade better than the city's consensus forecast, but perhaps just as significant were management's comments on sales volumes. They've been rising across the group for two consecutive quarters. At the like-for-like level - in other words, excluding the contribution made by new stores - I was told that they are more or less flat. But even that is an improvement on what has been the norm for the past couple of years.
There are various other metrics running in Sainsbury's favour too, and the break-neck growth of discounters Aldi and Lidl has shown signs of moderating of late.
Combined with the fact that real incomes have (at last) been rising and Sainsbury's is in a rather stronger position than rivals such as Tesco or Morrison's, and the stock market's reaction is understandable: in investment the trend is your friend, and the trend is hinting that Sainsbury's might just have turned the corner.
The operative word being “might”. The food retailing market remains unpredictable and brutally competitive. The discounters are still growing, and even the aforementioned Morrison's has been showing signs of life.
Sainsbury's isn't in a bad position to benefit if more money in consumers' pockets translates into them seeking out pricier products offering better margins. Moreover, parts of the business are growing quite robustly.
But let's not get ahead of ourselves, as some investors appear to have done. What Sainsbury's is doing at the moment is holding its own. In the current market that's still a more-than-creditable performance. Certain of its rivals would be cracking open the special-offer Cava if they could say the same.
The Independent