Sainsbury’s raises full year profit guidance
Sainsbury’s has increased its full year profit guidance despite a fall in sales in its third quarter.
While grocery sales edged up 0.1% in the six weeks to 8 January, sales in the category were down 1.1% across the 16-week period to the same date.
Meanwhile, general merchandise and clothing sales fell by 16% and 2.7% respectively in the quarter.
This meant that the supermarket’s retail sales were down 5.3% year-on-year, but up 1.4% on the same period two years ago prior to the pandemic.
Simon Roberts, Sainsbury’s chief executive, said: “I am really pleased with how we delivered for customers this Christmas. More people ate at home and our significant investment in value, innovation and service led to market share growth. At the same time, we are pleased to increase profit guidance for the full year.
“We were bold in our plan for product, value, innovation and service and delivered volume growth ahead of the market. We delivered our best value food this Christmas, launched our lowest ever priced Christmas dinner heading into the key Christmas shopping week and we had our biggest ever New Year.
“We also delivered a strong digital performance, responding to a surge in demand for online deliveries over Christmas and last-minute online gift shopping at Argos.”
The supermarket is now expecting underlying pre-tax profit to be least £720 million in the financial year to March 2022.
Giving a reason for the uplift, Sainsbury’s explained: “Our expectations for full year profits are ahead of previous guidance, with investment in the customer proposition and higher operating cost inflation offset by structural cost savings and stronger than expected grocery volumes, driven in part by increased in-home grocery consumption.”
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