Sainsbury’s reports a slight profit increase, asserting substantial market share growth.
- The underlying operating profit reached £503 million, demonstrating a 3.7% rise.
- Excluding fuel, retail sales grew 3.1%, with groceries seeing a 5% increase.
- Loyalty programme Nectar saw a 6% rise in participation, aiding customer savings.
- CEO Simon Roberts highlights enhanced value perception in fresh food categories.
Sainsbury’s has announced a modest increase in profits for the first half of the year, claiming notable market share growth across the industry. The retail giant’s underlying operating profit rose to £503 million, marking a 3.7% increase. This growth was driven largely by substantial grocery volume increases, although it was somewhat offset by a reduced contribution from Argos.
Retail sales, excluding fuel, showed a 3.1% upturn with groceries surging by 5%. However, general merchandise and clothing sales experienced a decline of 1.5%. CEO Simon Roberts remarked on the resilience of their food business, which continues to fortify its market position thanks to increased purchases of own-brand products, as consumers strive for value amidst a cost-of-living crisis.
The retailer’s loyalty initiative, Nectar, experienced a 6% growth in participation year-on-year, engaging over 11 million customers. This programme has significantly aided shoppers, facilitating savings of £2 billion since its inception. Additionally, the premium ‘Taste the Difference’ range noted an 18% sales increase, which Roberts described as ‘the strongest premium private label growth in the market.’
Roberts emphasised the company’s enhanced value perception, particularly within fresh food categories. He stated, ‘And with the biggest ever increase in customers’ value perception, we’re outperforming the market across the whole basket.’
Despite a 5% drop in Argos revenue over the half, the decline slowed to 1.4% in the later weeks. The retailer remains optimistic about continuing growth in retail operating profit and cash flow for the full year, as articulated by Roberts. He expressed confidence in their strategic approach, aimed at delivering sustainable growth and enhancing shareholder value.
Looking ahead, Sainsbury’s is investing in expanding its reach, acquiring new locations to better serve its growing customer base. Recent acquisitions include eleven Homebase stores and two Co-op stores, underscoring their commitment to accessibility and service expansion.
Sainsbury’s modest profit rise and strategic expansions reflect its adaptability and forward-thinking approach in a competitive market.
