Sainsbury’s sees jump in grocery sales after ‘winning over’ customers from rivals

The firm announced that its sales were up 9.4 per cent in its grocery division for the 52 weekend ending 2 March, with volume growth in every quarter of the year.

Sainsbury’s said this was in part due to its work to “protect customers from the impact of inflation”, after it invested £220m into lowering prices over the past year, and cut the prices of 4,000 items.

This led to the firm posting underlying profit before tax of £701m, up 1.6 per cent on the year prior.

Pre-tax profits, however, fell 15 per cent to £277m, in part due to the firm’s preparations for its phased withdrawal from banking, which the company announced earlier this year.

Simon Roberts, chief executive of J Sainsbury plc, 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. We have the best combination of value and quality in the market and that’s winning us customers from all our key competitors.

“We’ve done that by relentlessly investing in price; £780 million 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.

“The business has real momentum and we’re excited by our goal of making good food joyful, accessible and affordable for everyone, every day.”

Mr Roberts added that Nectar Prices had also been a “game changer” during the period, saving customers on average £12 on a typical £80 shop.

The company’s premium Taste the Difference range also saw growth, with sales up 12 per cent during the year. Sainsbury’s said that on average, one in four customer baskets included Taste the Difference products.

Despite gains in grocery sales, Sainsbury’s still lags behind Tesco for overall grocery market share.

According to the latest data from Kantar, Tesco held a 27.4 per cent share of the grocery market for the 12 weeks ending 14 April 2024. This compares to the 15.3 per cent market share held by Sainsbury’s for the same period.

Asda held a 13.4 per cent share of the grocery market, while Aldi held a ten per cent share.

Morrisons, which was previously one of the “big four” UK supermarkets until 2022, held an 8.7 per cent share, while Lidl held an 8 per cent share.

Sainsbury’s also doubled its rate of product innovation in the year leading up to March, launching 1,200 new products last year.

The company said it expects to continue to outperform the grocery market, and for its volume advantage to drive strong profits in the year ahead. It added that it expects to see underlying operating profit in its retail division of between £1.01bn and £1.06bn in the 2023/24 financial year, a growth of between five and ten per cent.

The firm added: “Our strong grocery momentum has continued into the new financial year and while we will face tougher comparatives, we expect to continue to generate volume growth and outperform the market. Against last year’s cool and wet Summer, we additionally expect a sales benefit across the business from more normal seasonal weather.”