Sainsbury’s grows half year profits
Sainsbury’s has increased its half year underlying pre-tax profit by 23% to £371 million after trade was driven by higher grocery sales.
In the 28 weeks to 18 September, group sales climbed by 5.3% to £15.7 billion after grocery sales rose by 0.8%. Clothing sales also grew, rising by 33.6% but general merchandise sales saw a decline of 5.8% following strong comparatives with last year’s lockdown period.
The retailer said grocery sales remained high with the Covid-19 pandemic as people continued to move eating occasions in-home. This trend was more pronounced the first quarter, but moderated in the second.
Meanwhile, clothing recovered strongly from a year of suppressed demand with no full range promotions run in the half and growth driven by full price sales.
Simon Roberts, chief executive of J Sainsbury plc, 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.
“Whilst customers are returning to many pre-pandemic shopping habits, online sales have remained very strong and we continue to grow market share. At the same time, our plan to transform Argos is on track, delivering significantly improved profitability.”
Sainsbury’s said it is continuing to expect customer behaviour to normalise and grocery growth to moderate in the second half of the financial year. but stressed it is well placed to deal with a backdrop of global supply challenges and a tight labour market.
Roberts added: “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.”