Sainsbury’s raised the lower end of its profit guidance after strong grocery sales growth, as the supermarket pressed ahead with its renewed focus on food.
The company said sales from continuing operations, excluding fuel, rose 2.6% to £14.0bn in the 28 weeks to 12 September, with grocery sales up 2.9%, driven by growing volumes as more customers chose it for their main shop. Underlying operating profit from continuing operations rose 3.6% to £525m.
It reported a statutory loss of £164m, but this reflected the costs of its Argos disposal; its continuing business remained profitable.
Sainsbury’s credited its price and customer-loyalty efforts, including the market’s biggest Aldi price match and its Nectar scheme, with winning market share, and said its online grocery sales grew 9%.
Simon Roberts, Chief Executive of J Sainsbury plc, said: “We know many households are finding things tough at the moment and we’re making it easier for customers to enjoy good food every day, whatever their budget. That’s why more people are choosing us for their weekly shop, driving continued volume growth in the first half.”
“We’re delivering trusted value for customers. Through Nectar Prices and the biggest Aldi Price Match in the market, Sainsbury’s is helping customers save on the products they buy most often and inflating behind the market.
It raised the bottom of its full-year guidance, now expecting underlying operating profit from continuing operations of between £1,025m and £1,065m.
The supermarket is selling Argos to Swift Partners, a deal expected to complete by February.
It held its interim dividend and is continuing a £300m share buyback. Chief executive Simon Roberts said it was building a simpler, more focused Sainsbury’s.
Keeping the dividend flat may disappoint some investors and may be why the stock fell 3% on Thursday.