London: British supermarket chain Sainsbury’s (SBRY.L) has raised its full-year profit outlook after a stronger-than-expected first half, signaling optimism heading into the critical Christmas trading season. The company’s shares rose 2% on Thursday, extending its year-to-date gains to 26%, reflecting investor confidence in its strategy and performance.

CEO Simon Roberts said, “So while we expect the market to remain highly competitive, our momentum gives us real confidence as we head into Christmas.”

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Strong First-Half Performance

Sainsbury’s reported retail underlying operating profit of £504 million for the first half of the fiscal year, up 0.2% compared with the same period last year. Retail sales, excluding VAT and fuel, rose 4.8% to £15.6 billion, with like-for-like sales up 4.5%.

The supermarket’s premium ‘Taste the Difference’ range delivered 18% sales growth in the first half, supporting overall market share gains, which have risen to a near-decade high of 15.3%.

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Competitive Strategy and Market Share Growth

Sainsbury’s has successfully leveraged a strategy of:

• Price matching discounter Aldi on hundreds of key items
• Offering better Nectar loyalty scheme rewards
• Maintaining cost discipline through targeted efficiency programs

This approach has helped the company continue to outperform the broader UK retail market, despite ongoing challenges such as high inflation, economic uncertainty, and cautious consumer spending.

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Impact of Market Trends

The supermarket sector has benefited from the continuation of the “dining in” trend, with consumers opting for premium supermarket products over restaurant dining, particularly as households seek to save money. This trend has been a boon for Sainsbury’s, even as the UK hospitality sector faces headwinds.

Sainsbury’s also highlighted its resilience amid competitive pressures from Asda, which has pledged sustained price cuts while working to reset its business model.

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Updated Financial Guidance

Sainsbury’s now expects to deliver retail underlying operating profit of more than £1 billion for the fiscal year ending March 2026. This represents an upgrade from its prior guidance of “around £1 billion” and is ahead of the £1.04 billion achieved in 2024/25.

CEO Roberts reiterated that the group is not engaged in talks to sell Argos, following discussions with China’s JD.com that concluded in September.

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Outlook for Christmas and Beyond

With momentum from its premium product range and competitive pricing strategies, Sainsbury’s enters the 2025 Christmas trading period with confidence, aiming to further grow market share and deliver strong profitability.

Roberts also appealed to UK Finance Minister Rachel Reeves not to introduce budget measures on November 26 that could increase inflationary pressures, noting that consumer caution remains high on discretionary spending during the festive period.