Sainsbury’s maintains outlook despite first half profit fall
Sainsbury’s has posted a dip in half year profits after it invested in keeping prices competitive during the cost-of-living crisis.
In the 28 weeks to 17 September, the supermarket’s statutory pre-tax profit fell by 29% to £376 million, although group sales rose by 4.4% to £16.4 billion.
Retail operating profit was also down, falling by 9%, following the retailer’s investment in value and the impact of higher operating costs and reduced grocery and general merchandise volumes post-pandemic.
Sainsbury’s said grocery sales edged up 0.2% in the period following strong second quarter growth of 3.8% as lockdown comparatives eased.
However, general merchandise sales dropped by 6.1% across the half year but rose by 1.2% in the second quarter due to improved availability, the impact of warm summer weather and strong market share gains.
Simon Roberts, Sainsbury’s chief executive, said: “We really get how tough it is for millions of households right now. Customers are watching every penny and every pound, and we know that they are relying on us to keep food prices as low as we can.
“Over the past year and a half, we have consistently passed on less price inflation than our competitors and I am confident we have never been better value. Argos is also performing well in a market where customers are looking for reassurance that they are getting great value and availability.”
The supermarket said trading momentum has been strong in the first few weeks of the second half as it continues to make volume market share gains.
Looking ahead, Sainsbury’s full year guidance remains unchanged with underlying pre-tax profit expected to come in at between £630 million and £690 million.
