Sainsbury’s shares rose in early trading on Tuesday following the release of a very respectable trading statement for the 16 weeks to 21 June 2025.
The supermarket recorded attractive growth across both the grocery and the general merchandise segments as the company’s actions to improve its offering paid off. Grocery sales grew 5% while general merchandise sales increased 4.2%.
Investors will be pleased to see the 30th consecutive period of customer number growth driving market share gains for the third year in a row.
The company has set out to improve its core grocery offering and is delivering. Sainsbury’s is successfully fighting off the challenge from the discounters by applying its ‘Aldi Price Match’ to 800 products and making Nectar prices available on 9,000 products.
At the same time, it’s maintaining its premium appeal via the launch of 250 new ‘Taste the Difference’ products that have been well received by customers.
“Sainsbury’s made its way onto more customers’ shopping lists in the first quarter. It continues to pinch market share off the competition, reaching its highest total in almost a decade,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
“With more trolleys rolling toward its tills, the nation’s second largest supermarket saw like-for-like sales rise 4.7% in the period. In part, that’s thanks to a herculean effort to improve its range, quality and value perception in recent times. And expanding its Taste the Difference range, ALDI price match and Nectar prices across even more products is helping to keep existing customers loyal.
There were questions about Argos and general merchandise starting to creep in after several periods of slow growth, and while today’s number won’t completely squash any doubts, they do show progress in customer activity driven by refined online experiences.
Although sales are rising, Sainsbury’s is clearly conscious of the impact of higher costs and has outlined a plethora of cost-saving measures to help preserve margins.
“Despite the top line moving higher, recent changes to employers’ National Insurance and minimum wages are set to bring at least £140 million of extra costs this year,” Chiekrie explained.
“Sainsbury’s is doing what it can to trim costs throughout the business, including closing its in-store cafes and streamlining behind-the-scenes operations, but the group’s guidance still points to full-year underlying retail profits remaining broadly flat at around £1 billion.
“Trading, so far, has been promising, and while it’s still early in the group’s financial year, signs of an all-out price war among the major supermarkets hasn’t materialised. If that remains the case through the rest of the year, the current profit guidance looks a touch conservative, so there could be some positive surprises for investors who are willing to remain patient.”
Sainsbury’s shares were 1.8% higher at the time of writing and are 7% higher on the year.