Sainsbury's raises profit forecast on grocery sales growth

Supermarket giant Sainsbury's has improved its profit forecast following a stronger performance in grocery sales over the past half-year. The retailer observed customers purchasing larger volumes of products as price inflation slowed during the period. However, chief executive Simon Roberts noted that "many households are finding things tough at the moment" due to pressure on consumer budgets.

The London-based company stated it has benefited from pricing strategies, including its Nectar Prices loyalty scheme and Aldi Price Match comparison initiative, to attract more shoppers. Sainsbury's reported to shareholders that total revenues increased by 4.1% to £16.2 billion for the 28 weeks ending 12 September 2026, compared to the previous year.

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Sales Performance Details

Sales from continuing operations, excluding fuel, saw a rise of 2.6%. This growth was underpinned by a 2.9% increase in grocery sales, which reached £13.2 billion for the reporting period. In contrast, general merchandise sales, which encompass the Tu clothing brand, declined by 3.4%. This reduction is attributed to decreased sales space within stores and a subdued clothing market.

Fuel sales experienced a significant increase of 17.8% over the half-year. This rise is a direct consequence of higher global oil prices, which have escalated since the onset of the Iran war. The company reported an underlying operating profit of £525 million for the half-year, marking a 3.6% increase.

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Sainsbury's has now revised its full-year profit expectation upwards. The company is on track to deliver an underlying operating profit between £1.025 billion and £1.065 billion. This updated forecast is an improvement from its previous guidance, which anticipated a range of £975 million to £1.075 billion. The company noted that this previous guidance would now equate to £965 million to £1.065 billion due to its proposed sale of Argos.

In July, Sainsbury's reached an agreement to sell Argos for a minimum of £120 million to Swift Partners, a newly formed company comprising retail experts. This sale comes approximately ten years after Sainsbury's acquired the brand for £1.4 billion. Mr Roberts stated, "As we progress the sale of Argos and further sharpen our focus on food, we are building a simpler, more focused Sainsbury’s."