Sainsbury's raises profit outlook following grocery sales growth

Sainsbury's has upgraded its full-year underlying operating profit guidance to a range of £1.025 billion to £1.065 billion. This follows a 3.6% increase in underlying operating profit to £525 million for the first half of the year ending September 12.

The retailer reported that grocery sales rose 2.9% to £13.2 billion, driven by increased product volumes as price inflation slowed. The company attributed this growth to pricing strategies such as its Nectar loyalty program and Aldi Price Match scheme. Total revenues increased by 4.1% to £16.2 billion during the 28-week period.

While grocery sales grew, general merchandise and clothing sales declined by 3.4%, partly due to a subdued clothing market and reduced store space. Conversely, fuel sales rose 17.8% due to higher global oil prices.

As part of its strategic shifts, Sainsbury's is proceeding with the sale of its Argos general merchandise business to Swift Partners for at least £120 million. Chief Executive Simon Roberts noted that while many households face financial pressure, the company is seeing continued volume growth as customers seek value.