Competition between two of the UK's largest supermarket chains heated up on Thursday morning after a news report published by Sky News claimed that an executive at Sainsbury's had issued an email to City analysts asking them to question rival Tesco's latest trading update.
The unnamed alleged source, which Sky News referred to as a "senior member of Sainsbury's investor relations team", reportedly questioned the appropriateness of an accounting technique applied to calculate Tesco's like-for-like sales over a five week period.
Tesco published its trading statement for the five week period covering Christmas and New Year on thursday morning referring to two separate figurtes for its like-for-like sales. In the first paragraph of Tesco's trading statement, the chain referred to like-for-like sales increasing by 1.8% whilst further on in the report's appendix it referred to a IFRIC-13 compliant like-for-like sales growth of 1.4%.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
An excerpt of the alleged email from the unnamed Sainsbury's source was published on Sky News quoting the following statements: "I thought it worth pointing out that the UK [like-for-like] number of 1.8pc that Tesco are reporting this morning is non-IFRIC compliant".
"This is a bit disingenuous, they should be using the 1.4% number in their headline. All of our reported numbers are IFRIC compliant, as they have to be under IAS18!"
Sky also points out that "The numbers announced by Tesco covered 42 trading days, while Sainsbury's statement covered 98 days, further pointing to the danger of relying on comparisons which can be misleading."
Tom Hoskin, head of corporate media at Tesco told ShareCast: "We publish every formulation of LFL number, including the IFRIC-adjusted."
Sainsbury's declined to comment when ShareCast contacted the press office.
MF
-
Landlords ordered to make rental properties more energy efficient by 2030The government has said rental properties must have a minimum EPC rating of C by 2030. We explain how much it will cost landlords to upgrade their buy-to-let portfolio
-
Primark owner Associated British Foods is an overlooked gem going cheap — should you buy shares?Associated British Foods, the owner of Primark, is a family-owned business, which means it is passed over by the increasingly popular passive investment funds. That spells opportunity for private investors, says Jamie Ward.
