Sainsbury’s has lifted its full-year profit forecast after posting better-than-expected sales and earnings for the first half of its financial year, mirroring rival Tesco’s recent upgrade.

Britain’s second-largest supermarket reported retail underlying operating profit of £504 million for the six months to September 13, up 0.2% year-on-year.

Retail sales, excluding fuel and VAT, rose 4.8% to £15.6 billion, with like-for-like sales increasing 4.5%.

The group is now expecting to deliver more than £1 billion in retail underlying operating profit for the year to March 2026, a figure which rises above its earlier guidance of ““around £1 billion” and ahead of the £1.04 billion achieved in 2024/25.

Chief executive Simon Roberts said the retailer’s offer “has never been stronger” and expressed confidence heading into the key Christmas trading period.

“While the market remains highly competitive, our momentum gives us real confidence as we head into Christmas,” he added.

The upgrade highlights how the UK’s two biggest supermarket chains, Sainsbury’s and Tesco, have outperformed the broader retail sector this year.

This has been primarily helped by their individual focus on value as consumers grapple with high inflation, weakening employment, and looming tax increases.

Both supermarkets have benefited from the ongoing “dining in” trend, with shoppers opting for premium supermarket ranges over restaurant visits as a way to save money.

Sainsbury’s shares have risen 23% so far this year, while Tesco’s are up 27%.

The grocery giant said its competitive position has strengthened thanks to a strategy of matching Aldi’s prices on hundreds of key items, offering exclusive Nectar loyalty discounts, and funding those price cuts through an ongoing cost-reduction programme.

Sainsbury’s market share in the UK has climbed to a near-decade high of 15.3%, further underscoring the success of its value-led approach.

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