Sainsbury’s has reported an increase in profits amid a surge in larger customer purchases, particularly in its premium range.
In the first half of the year, Sainsbury’s retail underlying profit rose by 3.7%, reaching £503 million. This growth was driven by a 5% increase in grocery sales, marking significant market share gains for the supermarket. The period up to 14 September saw nearly two-thirds of large baskets containing items from the premium ‘Taste the Difference’ range, with this segment’s sales climbing 18%.
Sainsbury’s attributes this success to a strategic shift in its value perception, having invested £1 billion in enhancing its value proposition over recent years. This investment appears to have resonated with consumers, boosting confidence in Sainsbury’s grocery offerings and attracting more shoppers for substantial food purchases. Simon Roberts, Sainsbury’s Chief Executive, highlighted the store’s commitment to delivering a balanced mix of value, quality, and service. He emphasised the remarkable growth in the premium private label sector, describing it as the most robust within the market.
Looking forward, the company plans to expand its presence by opening approximately 20 new supermarkets and 20 to 25 convenience stores over the next 18 months. This expansion includes the acquisition of several Homebase and Co-op locations. Roberts remains optimistic about future performance, particularly with the festive season approaching. Sainsbury’s anticipates retail underlying profits to fall between £1.01 billion and £1.06 billion, reflecting a growth projection of 5% to 10%.
The company also expects to bolster its profitability through savings initiatives and continued growth in contributions from the Nectar programme, furthering its competitive edge in the grocery sector.
With strategic investments and a focus on premium offerings, Sainsbury’s is well-positioned for continued growth and market leadership.
