Sainsbury’s ‘outperforms market’ as sales continue to grow

Retail sales excluding fuel rose 4.9% to £25.9bn across the group in the 52 weeks to February 28.

Underlying profit before tax grew to £718m, growing 1.3% year on year, while group revenue grew 2.7% to £33.6m. Retail underlying operating profit fell 1.1%.

Grocery sales were up 5.2% with “consistently strong volume growth”, as it has invested £1.3bn over the last five years in this category.

Taste the Difference sales went ahead of the £2bn target, fresh food sales grew 16%, and online sales rose 13%

General merchandise sales fell 3.2%, which the group said was “strategic” as it wanted to allocate more space to food, but clothing sales did rise 4.8%.

Argos’ sales edged up 0.7% to £4.1bn in a “subdued market”, but Sainsbury’s will accelerate the transformation of Argos with a dedicated team aimed at helping drive cost reduction and support investments in infrastructure and tech platforms. 

Looking ahead, the group said conflict in the Middle East is set to impact the business and customers, and that this has to be reflected in profit guidance. It is expected underlying operating profit will be between £975m and £1,075m.

Sainsbury’s chief executive Simon Roberts said: “More and more customers are choosing Sainsbury’s for more of their shopping, trusting us to deliver great value day in day out. The conflict in the Middle East means customers are even more focused on the cost of living, and we are absolutely committed to making sure everyone gets the best possible value when they shop with us.

“By staying relentlessly focused on the things that matter most – value, quality, availability and service – we have outperformed the market for the sixth year in a row. Rather than pass through the full extent of cost inflation, we invested to sustain the strength of our competitive position while also refreshing stores, improving digital experiences and increasing colleague pay by five per cent.

“Our balanced choices reflect a consistent long-term approach to creating value for shareholders: strengthening our relationships with customers, colleagues and suppliers and building a stronger Sainsbury’s for the future.

“We will do everything we can to support our customers and colleagues over the coming months, with absolute focus on keeping prices low. We have made a positive start to the new financial year, with continued strong grocery momentum.”