By James Davey
LONDON (Reuters) -Sainsbury’s, Britain’s second-largest supermarket group, raised its full-year profit outlook after a stronger-than-expected first half, saying it was entering the key Christmas trading period with momentum.
Shares in the group were up 2% on Thursday, extending 2025 gains to 26%, after CEO Simon Roberts also said Sainsbury’s offer had “never been stronger”.
“So while we expect the market to remain highly competitive, our momentum gives us real confidence as we head into Christmas.”
Sainsbury’s upgrade, following one from industry leader Tesco last month, confirmed that the two biggest supermarket groups are continuing to outperform the wider UK retail market with their focus on value at a time of weakening employment, still high inflation and concerns about tax increases in this month’s budget.
The two have benefited from the continuation of the “dining in” trend, with consumers opting for premium supermarket products over a trip to a restaurant, partly to save cash – bad news for Britain’s beleaguered hospitality sector.
GROWING MARKET SHARE SUPPORTED BY PREMIUM RANGE
Sainsbury’s, whose UK grocery market share has grown to a near decade high of 15.3%, said its premium ‘Taste the Difference” range delivered fresh sales growth of 18% in its first half to September 13.
Echoing comments from other retailers this week, Roberts appealed to finance minister Rachel Reeves not to introduce measures in her November 26 budget that would add inflationary cost pressures to the industry, noting consumers were being cautious on discretionary spending ahead of the event.
Sainsbury’s said it now expected to deliver retail underlying operating profit of “more than 1 billion pounds” for its year to March 2026 – ahead of previous guidance of “around 1 billion pounds” and the 1.04 billion pounds made in 2024/25.
Retail underlying operating profit was 504 million pounds in its first half, up 0.2%.
Retail sales, excluding VAT sales tax and fuel, rose 4.8% to 15.6 billion pounds, with like-for-like sales up 4.5%.
In April, Sainsbury’s set aside cash to maintain its competitive edge after a pledge of sustained price cuts from Asda, the number three player, which has been losing market share and is taking a hit to profit to re-set its business.
Sainsbury’s said it is winning share thanks to a strategy of matching discounter Aldi’s prices on hundreds of key items and providing better prices for members of its popular Nectar loyalty scheme, financed by a programme of cost cuts.
Roberts said the group was not talking to any suitors for its Argos business after discussions with China’s JD.com ended in September.
(Reporting by James Davey; Editing by Kate Holton, Alexandra Hudson)
