In what is an increased cutting market, FTSE 100 Retail seller Sainsbury’s (LSE: SBRY) made impressive progress, and last year (to February) the largest gains in the market have made more than 10 years.

Sales increased by 4.2 %, or 3.2 % on a similar basis, reflecting what the CEO says is “”A winning mix of value, quality and service that customers loveTo celebrate, I announced plans to reward the shareholders at 250 million pounds of special profits and the stock re -purchase program of 200 million pounds.

The second largest supermarket in Britain plans to build its latest progress, with 14 new supermarkets to expand real estate. Market conditions are difficult, but heavy investment in groceries in prices, products and strength withdrawal for the loyalty of nectar continues to attract more fishermen.

This reflects its recent successes, Sainsbury’s witnessed 10.1 % increase in stock prices during the past year. But can Fotsi gush continue its strong momentum? I am not sure.

Competitive pressure

As I said, the performance of the work was in an environment of bloody competition. The question is whether he can continue to do so, as Aldi and Lidl value chains grow from their property, its competitors open the spaces of new stores, and the “Big Four” operator starts a new price war.

This reflects these pressures, said Sainsbury’s said it expected the basic annual operation to the operating line at 1.1 billion pounds in this fiscal year.

Like its competitors, the Sainsbury’s can continue to deduct the stores of sales in the store and online sales sizes. But this may come at a catastrophic expense of the already high -raising retail margins (this was 3.17 % in the fiscal year 2025 on the basis of basic operation).

Other threats

Pressing the retail for lowering prices is especially great as the cost crisis continues. Unfortunately, some economists suggest that the power of spending on the consumer may remain weak for the rest of the contract, if not.

According to the Think-Tank’s decision, the typical family income will increase by only 1 % between 2025 and 2030. For the lowest families that earn, the income is expected to decrease the same percentage over the five years.

This view, which is especially worrying for the Sainsbury’s, given the GENERAL Green Cargo section in Argos, which is more vulnerable to the conditions of consumer from the fragmentation of food.

As if this was not enough, food retailers also face the risk of sales as weight loss officers such as OzemPIC are increasingly common, which limits the demand for dessert and other guilty pleasures.

About 4 % of British families are now used as these drugs, according to Kantar WorldPanel.

But, as the head of retail and consumer insight in the company says:This is nearly twice up to last year, so while it is still somewhat low, it is certain that the industry must monitor these drugs the ability to direct options in Till.“.

Beware the buyer

I don’t think these risks are currently reflected in the evaluation on the sainsbury shares. After the last price gains, they trade the price ratio (P/E) about 13 times, which is higher than the broader average in FTSE 100.

As a result, I think investors should think about buying other momentum instead.