Sainsbury’s has reported a rise in profits for the first half of the year, attributed to customers opting for larger shopping baskets and favouring the supermarket’s premium range.
In the 28 weeks leading up to 14 September, Sainsbury’s saw its retail underlying profit increase by 3.7% to reach £503 million. Meanwhile, grocery sales experienced a 5% rise. This growth is part of what the supermarket describes as the largest market share gains in the industry, as more consumers turn to Sainsbury’s for their major grocery purchases.
Nearly two-thirds of these larger shopping baskets included products from Sainsbury’s premium ‘Taste the Difference’ range, which saw an 18% sales increase over the quarter. The company attributes its success in attracting larger baskets to a shift in how customers perceive value, having invested £1 billion in enhancing value perception over recent years.
Simon Roberts, Sainsbury’s chief executive, stated that their food business is strengthening, leading to the largest market share gains in the industry with robust volume growth. According to Roberts, customers are increasingly recognising the supermarket’s combination of value, quality, and service. ‘Reflecting our leading quality, more customers are choosing Taste the Difference, with sales up 18%, the strongest premium private label growth in the market,’ he remarked. ‘And with the biggest ever increase in customers’ value perception, we’re outperforming the market across the whole basket, particularly in core fresh food categories.’
Sainsbury’s plans to extend its reach by investing in new locations, including the recent acquisition of eleven Homebase and two Co-op stores. Over the next 18 months, they expect to open around 20 new supermarkets and 20 to 25 convenience stores. As the festive season approaches, Sainsbury’s anticipates continuing strong performance and aims for robust profit growth over the full year, with a forecasted retail underlying profit between £1.01 billion and £1.06 billion, indicating potential growth of 5% to 10%.
Sainsbury’s strategic investments and focus on premium offerings have positioned it favourably for continuing growth, as evidenced by recent profit increases and market share gains.
