Sainsbury's defiant on FSA probe

SUPERMARKETS group Sainsbury's is resisting calls to bring forward its strategy presentation, despite facing a possible rebuke for briefing analysts about its financial position.

The chain is under heavy pressure to clarify its earnings outlook, but has told regulators that it does not need to update the market until its presentation on 19 October.

Sainsbu's said: 'If we had something to say then we would have said it.'

The Financial Services Authority is investigating whether Sainsbury broke the rules by telling Merrill Lynch that its profit forecast was 'too high'. The regulator may issue a public censure to the retailer for 'selective disclosure'.

Sainsbury's points out that the share price did not move when Merrill lowered its forecasts, which suggests there was no 'false market' in the shares.

The retailer does not believe it has done anything wrong and is reluctant to bow to pressure to issue a statement on its profits. However, many analysts are confused and demanding answers.

The debacle threatens to eclipse Justin King's 'big day' on 19 October, where he will set out his plans to sort out the ailing chain.

King, who became chief executive in April, is expected to halve the dividend to save £150m and cut up to 750 head office jobs. He desperately needs to grow sales so is likely to announce further price cuts and try to improve the quality of the food ranges.