Sainsbury’s profits jump 7% as own-brand powers sales

Sainsbury’s has trumped its rivals by posting strong first-half trading figures.

The supermarket chain reported a 7% increase in underlying pre-tax profits to £400m on sales up 4% to £14bn in the 28 weeks to 28 September.

Like-for-like sales during the period rose 1.4%, meaning Sainsbury’s has now recorded 35 consecutive quarters of like-for-like growth.

It also increased its market share by 13 basis points to 16.8% in the six-month period – its highest for a decade and the only one of the big four to increase share [Kantar].

Own-label grew at more than twice the rate of branded goods, Sainsbury’s said, with its premium range Taste the Difference clocking up double-digit growth.

General merchandise and clothing grew at “around twice the rate of food sales”, online by more than 15% and convenience at over 20%.

It opened six new supermarkets and 50 convenience stores during the period, as well as extending two existing stores. However, Sainsbury’s also said it had reviewed its property pipeline and had identified “some sites where we no longer wish to build a supermarket”, resulting in a £92m impairment charge.

And in a nod to The Grocer 33, Sainsbury’s said it had won 15 out of 28 Store of the Week awards.

“Our share of the grocery market is the highest for a decade at 16.8% following 35 consecutive quarters of like-for-like sales growth,” said CEO Justin King.

“We are helping customers ‘Live Well For Less’ through high-quality, affordable own-label products, Brand Match, Nectar and targeted coupon-at-till promotions.

“While customers’ budgets remain tight and any recovery in the economy may take time to take effect, our consistent strategy and strong values-driven culture means we are well placed to continue to deliver for customers, colleagues and shareholders,” he added.

Christmas

The results were released on the same day Sainsbury’s unveiled its Christmas TV ad campaign – a three-and-a-half minute trailer for a new film it has been working on in conjunction with Oscar-winning director Kevin Macdonald.

Meanwhile, Sainsbury’s is to create 16,000 temporary jobs over the busy festive period. Around 2,000 of the jobs are expected to be made permanent.

“Christmas is the busiest time of the year in our stores, so in order to give customers the best possible service we are boosting our teams with extra support,” said group HR director Angie Risley.

“It’s also a great opportunity for people to join our thriving business and get some experience working for a busy retailer.”