The challenges posed by rampant inflation might be J Sainsbury’s best chance in almost a decade in levelling the playing field against arch-rival Tesco — at least that’s what investors seem to think.
Sainsbury’s has long attracted a more lowly valuation than Tesco, Britain’s largest supermarket. A longer-term record of weaker sales growth and the greater exposure to discretionary spending that came with the chain’s acquisition of Argos are two reasons for this inferiority in the eyes of investors.
Yet the discount between the two FTSE 100 constituents is now the slimmest it has been since 2014, when Tesco became embroiled in an accounting scandal. An enterprise value of just under five times forecast earnings before taxes and other charges is closing in on the
