Sainsbury’s posts increase in profits as market share rises

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Sainsbury’s has reported an increase in profits in its half-year results as improved grocery sales drove growth in market share.

Sainsburys Nine Elms outdoor shot

The supermarket giant said underlying profit before tax jumped 23% to £371m in the 28 weeks to September 18.

Compared with pre-pandemic levels, underlying profit surged 56%, which Sainsbury’s attributed to growth in grocery sales and cost reduction programmes.

Sainsbury’s expects to post an underlying profit before tax of at least £660m for the full year ending March 2022.

On a statutory basis, Sainsbury’s registered a pre-tax profit of £541m, compared with a £137m loss last year.

Sainsbury’s group revenues also rose 5.3% to £15.7bn this year. Digital sales, including those raked in by its Argos business, accounted for 39% of all retail revenues, reaching £5.8bn.

Grocery sales increased 0.8% during the six-month period as Sainsbury’s hailed market share gains at a time when consumers continued to eat more at home.

Online grocery sales climbed 13% year on year and more than doubled compared with pre-pandemic levels.

General merchandise sales dropped 5.8% in the same period, which Sainsbury’s attributed to strong comparatives sparked by national lockdowns. Members of the grocer’s Nectar digital loyalty scheme passed the 8 million mark during the period.

Sainsbury’s chief executive Simon Roberts said the business was in a “good position” heading into the crucial Christmas trading period.

He said: “We are making good progress delivering our plan to put food back at the heart of Sainsbury’s. We have grown market share through improving value for customers, tripling our rate of food innovation and delivering customer satisfaction ahead of our key competitors.

“Our industry faces labour and supply chain challenges. However, our scale, advanced cost-saving programme, logistics operations and strong supplier relationships put us in a good position as we head into Christmas.

“I would like to thank all my colleagues and all our suppliers for their hard work, commitment and dedication in the weeks ahead to ensure we deliver the best possible Christmas for our customers.”