Sainsbury’s expects strong profit growth in the year ahead as it beat expectations for its 2023/24 financial year.
Pre-tax profit for the year to 2 March edged up 1.6% to £701m, topping last year’s figure, as it achieved record grocery market share gains and volume growth that accelerated in every quarter.
The UK’s second-biggest grocer said it expects to make up to £1.06bn in underlying operating profit from its retail operations in 2024-25 – up from £966m last year.
The group posted a 6.8% rise in retail sales, excluding fuel, driven by a 9.4% jump in its grocery business.
Chief executive Simon Roberts said: “We said we’d put food back at the heart of Sainsbury’s and that’s what we’ve done. Our food business is firing on all cylinders.”
Its general merchandise, which includes Argos, business had a tougher time with sales down 0.5% and clothing sales fell 6.4%.
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Sainsbury’s, which has a 15.3% share of Britain’s grocery market, behind only Tesco, said its strategy of matching Aldi’s prices on essential items and providing better prices for members of via its Nectar loyalty scheme was driving its strong results.
Roberts said: “Nectar Prices has been a game changer for customers, saving them £12 on a typical £80 shop.”
The grocer said its value perception was the strongest it had been in six years, and it was “the only full-choice supermarket gaining volume from limited choice competitors” such as Aldi and Lidl.
Roberts said: “We have the best combination of value and quality in the market and that’s winning us customers from all our key competitors, driving consistent volume market share growth as more customers choose us for their weekly shop and all their special occasions.
“We’ve done that by relentlessly investing in price; £780m over the past three years. We know it’s still tough out there for so many households and we’re doing all we can to save money right across our business to keep prices low – we have reduced 4,000 products over the last year alone.
“As we embark on our ‘Next Level Sainsbury’s’ strategy, we’ll continue to make deliberate, balanced choices to support our customers, colleagues, communities and farmers.
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