Sainsburys today announced a sales increase for Q2 of 4.6%, excluding petrol and VAT. This follows the announcement by Tesco of a 2.1% sales increase, but is it a case of hold, buy or sell Sainsbury shares and Tesco shares?

Sainsbury

The Sainsburys increase in sales was in line with City forecasts. It is though lower than the increase recorded for Q1.

Sainsburys now has weekly transaction of 18.5 million, up 800,000 year on year.

As Justin King, Cheif Executive, comments ‘Our non-food ranges are performing well and growing three times the rate of food.’

The Sainsbury’s TU clothing range is now well established and online food home delivery has seen sales growth of 20%.

King added ‘While we expect market growth to slow in the coming months due to reduced inflation, the universal appeal of our focus on quality and value leaves us well positioned going forward.’

The Sainsbury share price (SBRY.L) is currently down 2.76% at 314.00p.

Tesco

Tesco, as Terry Leahy, Chief Executive, comments ‘is delivering solid growth and improving volumes.’

Tesco is also seeking to take on the high street banks, renaming its personal finance division Tesco Bank as part of this.

Yesterday it raised its interim dividend to 3.89p.

The Tesco share price (TSCO.L) is currently down around 2% at 382.8p.

So to the question of whether to buy, sell or hold these supermarket shares.

Nick Raynor, investment adviser at The Share Centre, comments ‘Despite Sainsbury’s encouraging results, Tesco remains a firm favourite with consumers, occupying the largest market share in the sector.

We recommend Tesco as a buy for those investors looking for more stability during the downturn and long-term growth.

Tesco’s portfolio is far more diverse and it continues to perform well both at home and away.

However, we continue to list Sainsbury’s as a hold for those looking for income due to its solid dividend of 4 per cent.’

Investors should of course make their own judgements on buying or selling shares and if in doubt seek independent financial advice. ©MoneyHighStreet.com Personal Finance