Photo by Nathan Stirk/Getty Images
Favourable weather helped Sainsbury’s to grow sales in the last quarter, it announced on Tuesday, as it remained the sector’s strongest performer.
At 291.6p per share, the FTSE 100 retailer rose 0.6% on the news.
Like-for-like sales across the company’s core Sainsbury’s grocery and Argos general merchandise divisions rose 4.9% in the 16 weeks to 21 June, it said. This figure excludes the impact of fuel sales at its gas stations.
At Sainsbury’s, like-for-like sales rose 4.9%, driven by a 5% increase among its grocery lines. Combined general merchandise and clothing revenues meanwhile grew 4.2% year on year.
Like-for-like Argos sales rose 4.4% year on year.
At group level, corresponding sales growth was one percentage point higher that the previous quarter. It was also up from the 2.6% recorded in the same three-month period in 2024.
Further Outperformance
The business – which is the UK’s second biggest supermarket behind Tesco — said that “more customers are choosing Sainsbury’s as their first choice for food, with 30 successive periods of growth in primary customer numbers and market outperformance over Easter.”
It described the value it offers consumers as “stronger than ever.” This was helped by it spreading its ‘Aldi Price Match’ programme to 800 products, as well as offering cheaper prices for members of its Nectar loyalty scheme to more than 9,000.
Sainsbury’s added that sales of its ‘Taste the Difference’ premium ranges rose 18% over the quarter, greater than the wider market.
The retailer said that “Argos” also outperformed what it described as a “subdued, highly competitive and deflationary general merchandise market.” However, it added that sales were boosted by warm weather and weak comparatives a year earlier.
Strong Start
Chief executive Simon Roberts commented that “our winning combination of great value, outstanding quality, excellent availability and leading customer service has driven further share gains, reaching our highest market share in almost a decade.”
He noted that the grocer continues growing faster than the broader market, continuing the trend of the past three years.
Roberts added that “we are well set to deliver another strong performance over the summer.” He said that sunny weather over the spring helped push Taste the Difference fresh food sales 20% higher year on year.
Guidance Upgrades Incoming?
Analyst Adam Chiekrie of Hargreaves Lansdown noted that further strong trading at Sainsbury’s is partly due to “a herculean effort to improve its range, quality and value perception in recent times,” while adding that “expanding its Taste the Difference range, Aldi price match and Nectar prices across even more products is helping to keep existing customers loyal.”
He also noted that talk of a new price war among the UK’s major supermarkets has failed to kick off so far.
Fellow ‘Big Four’ grocer Asda announced at the start of the year plans to use “a pretty significant war chest” to slash prices and rebuild its own market share.
Chiekrie said that “if that remains the case through the rest of the year, the current profit guidance [at Sainsbury’s] looks a touch conservative, so there could be some positive surprises for investors who are willing to remain patient.”
The Footsie retailer has guided for underlying operating profit of £1.1 billion, matching last year’s levels.
