Sainsbury's long-standing shareholder, Qatar Investment Authority (QIA), has announced that it is cutting its stake in the supermarket from 10% to around 6.8%.

The PA reported that the FTSE 100 supermarket’s biggest shareholder will now be the owner of Royal Mail, Daniel Kretinksy.

QIA, which has been Sainsbury’s biggest investor since 2007, stated that it plans to sell up to 98 million ordinary shares in the supermarket, but gave no reason as to why.

The announcement comes after Sainsbury’s increased its profit guidance for the current financial year last month.

After QIA’s statement, shares in Sainsbury’s fell by 4%.

Head of markets at AJ Bell, Dan Coatsworth, said that the update is a hit to the supermarket.

He concluded: "The stock has enjoyed a good run since April, thanks to business progress. A food-first strategy has reaped significant rewards and Sainsbury’s has managed to breathe new life into the business.

"QIA might take the view that now is a good time to cut its exposure as Sainsbury’s regaining its mojo is one thing, taking it to another level is more challenging.

"Competition in the grocery sector is fierce. Aldi and Lidl are showing no signs of taking their foot off the pedal, rival Asda is working hard to play catch-up after a lacklustre few years, and Tesco continues to dominate. Sainsbury’s might find it hard to further increase its market share unless one of its rivals makes a serious mistake."

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