Sainsbury’s – Britain’s second-biggest supermarket group by market share – is on track to deliver full-year profit growth of around 7%, the retailer said on Friday.
It credited robust sales over the Christmas quarter for offsetting weakness in general merchandise.
The group, which trails only Tesco, reported a 2.8% rise in underlying sales – its preferred profit measure – for the third quarter to 4 January.
Grocery sales rose 4.1% driven by strong sales of party food, Champagne and sparkling wine, while general merchandise and clothing sales in Sainsbury’s stores fell by 0.1% and by 1.4% at its Argos business.
Like Tesco, Sainsbury's also benefitted from the trend of Brits dining at home more, boosting sales of its premium ‘Taste the Difference’ range by 16% in the Christmas weeks.
CEO of Sainsbury’s Simon Roberts said, “We have won grocery market share for the fifth consecutive Christmas, with more customers choosing Sainsbury’s for their big shop.”
Profit
Shares in the group were down 2% in early trading, while other retailers also fell – mirroring Thursday’s corporate updates when solid Christmas trading at Tesco and Marks & Spencer was overshadowed by concerns about the strength of the economy and consumer for 2025.
Sainsbury’s said it expected its full-year underlying operating profit to be in line with consensus and the midpoint of its guidance range of £1.10-1.06 billion, representing growth of about 7%.
It said its strategy of matching discounter Aldi’s prices on hundreds of items and providing better offers for members of its popular Nectar loyalty scheme – financed by cutting costs – was paying off, helping it to win market share.
Industry data published on Tuesday showed that Sainsbury’s ended 2024 with grocery market share of 16.0%, up 20 basis points on the year.
Grocery Sector
On Thursday, Tesco reported a 4.1% rise in underlying UK sales for the Christmas trading period.
The whole sector, however, faces pressures from rising costs and inflation as the British economy struggles to grow.
Sainsbury’s – whose shares have fallen 8% over the last year – said in November that increased social security payments imposed in the new Labour government’s first budget last October would add £140 million to its tax bill in its 2025/26 year.
It said on Friday it would raise pay for its hourly-paid workers by 5% in 2025, split into two separate increases.
Read More: Festive Promotions And Discounts Boost UK Grocery Growth – NIQ
