Sainsbury's reported Christmas trading in line with expectations today, although its shares were lower on signs its strong recovery could be reaching a plateau.
Britain's third-largest grocer by market share said like-for-like sales rose 5 per cent, excluding fuel, in line with expectations for the 12 weeks to December 30th, on strong sales of premium and organic foods over the holiday.
But shares in the grocer were down 1.8 per cent at 407-1/2 pence by 8.50am, after making gains of nearly 25 per cent in the past six months, more than two years into chief executive Justin King's lauded turnaround of the chain.
Analysts' expectations had been for underlying sales up as much as 5 per cent against tough comparative figures.
Grocery inflation in the third quarter was 1.7 per cent, on the back of rising energy costs and commodity prices, Sainsbury's said, higher than analysts' expectations of a 1 per cent rise.
"Although this is not a bad trading result for Sainsbury's, we see little to get excited about," JP Morgan analysts wrote.
Mr King shrugged off the share price fall and said the group had "good momentum" going into the fourth quarter.