Sainsbury’s sales and profits edged up in its first half as it claimed to be making “the biggest market share gains in the industry”.
The grocery giant‘s retail underlying operating profit hit £503m, up 3.7%, driven by strong grocery volume growth, though this was partially offset by a lower contribution from Argos.
Retail sales, excluding fuel, advanced 3.1% with grocery up 5%, but general merchandise and clothing sales were down 1.5%.
CEO Simon Roberts said its “food business is going from strength to strength, and we’re making the biggest market share gains in the industry, with continued strong volume growth,” noting had retailer benefitted from increased own-brand purchases as customers seek value in the cost-of-living crisis.
Sainsbury’s loyalty programme, Nectar, saw participation grow 6% year-on-year, with over 11 million customers actively engaged, saving shoppers a total of £2bn since launch.
It also saw growth in its premium offering, with Taste the Difference sales up 18%, which Roberts called “the strongest premium private label growth in the market”.
“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,” he added.
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Argos revenue dropped 5% over the half, however the declined slowed to 1.4% in its second half.
The retailer said Argos “trading has improved through the second quarter and in more recent weeks, so we continue to expect to deliver strong retail underlying operating profit growth and free cash flow generation for the full year”.
Looking ahead, Roberts said: “We remain focused on delivering value for our customers while maintaining strong operational performance.”
He added: “We are confident that our strategy will continue to deliver sustainable growth and drive long-term shareholder value.”
“More and more customers are coming to us for their big food shop, recognising our winning combination of value, quality and service.
“With strong momentum and increasing confidence in the strength of our grocery offer, we’re now investing to bring the best of Sainsbury’s to more people in more locations, including the recent acquisition of eleven Homebase and two Co-op stores.”
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