Sainsbury’s, the UK’s second largest supermarket group after Tesco, has posted a 7.2% rise in annual profit but said rises in costs and stiffer competition will mean little or no growth in this financial year.
The group, which has a UK grocery market share of 15%, forecast retail underlying operating profit, its preferred metric, of “around” £1 billion for its 2025/26 year, compared with £1.036bn in the year to 1 March 2025, which was in line with expectations. Analysts had on average been forecasting £1.08bn for 2025/26.
It reported a 4.2% rise in full-year sales excluding fuel to £26.6bn, with strong growth in its core grocery business and improved online performance, although Argos sales declined 2.7%.
It said it had completed a £200m share buyback, and announced plans for at least another £200m in 2025-2026, alongside a £250m special dividend funded by bank disposal proceeds.
“We’ve transformed our business over the past four years,” said chief executive officer Simon Roberts.
“More people are choosing Sainsbury’s for their main grocery shop as a result, delivering our highest market share gains in more than a decade.”
Mr Roberts said the company was committed, above all else, to sustaining its strong competitive position, adding that it expected to continue to outperform the market.
“Our customer offer is the strongest it has ever been – we’ve expanded Aldi Price Match to more products than ever before in addition to offers on more than 9,000 products with Nectar prices.
“Customer satisfaction with product availability is at record levels and we’re continuing to add more new, innovative products to our ranges. Nectar is taking our ability to create personalised value and loyalty to the next level and our long-term contracts with farmers and suppliers demonstrate our commitment to resilience and sustainability across the UK food system.
“Our belief in the strength of Sainsbury’s offer has driven our decision to make our largest investment in expanding our store space in over a decade as we open supermarkets in key new locations and extend food space within many of our existing stores.”
Shares were up 6.8p (2.8%) at 254.8p in the first hour of trading.
source