Sainsbury’s has raised its annual profit guidance to more than £1bn after it maintained sales momentum in the first half of the year.
Sainsbury’s total sales – excluding fuel – were up 5.2% to £15.6bn in the 28 weeks to 13 September.
This was driven by grocery volume growth ahead of the market for a fifth consecutive year, the supermarket said.
Profits therefore came ahead of expectations, with underlying operating profit flat on last year at £504m and now expected to fall above the £1bn for the full year.
In April, Sainsbury’s reported annual profits over £1bn but warned profits would have to fall as it invested to “maintain its competitive position”.
CEO Simon Roberts said this week the supermarket started the year with one clear priority: to sustain the strong competitive position it has built over the last five years.
“We have delivered on this in the first half, with focused and effective investment to ease cost of living pressures, keeping price inflation behind the wider market and delivering our winning combination of great value, trusted quality and leading service.”
He added: “Our offer has never been stronger. So while we expect the market to remain highly competitive, our momentum gives us real confidence as we head into Christmas and we have strengthened our profit guidance today.”
Sainsbury’s grocery sales led the way with growth of 5.3%, boosted by favourable weather driving volume growth, while its investment in keeping prices down helped stem the impact of inflation on shoppers.
Sainsbury’s opened six new supermarkets in the first half of the year with sales in these new stores ahead of expectations by almost 20%. It plans to open another six in the second half.
Roberts said Sainsbury’s “food quality and innovation” sets its apart and the gap to competitors is widening on quality perception.
The supermarket launched over 600 new products through the summer, around half of which were Taste the Difference. This helped its premium range grow sales by 18% in the period.
Its general merchandise and clothing division grew sales 3.3% as an improved clothing range and strong availability offset a decline in general merchandise sales due to Sainsbury’s providing less store space.
Argos sales were up 2.3%, while fuel fell 11.3% due to lower demand and lower forecourt prices.
No comments yet