Sainsbury's has published interim results for the 28 weeks ended 17 September 2022 (H1), showing that grocery sales were up but profits dipped, against the background of soaring grocery inflation.
Sales highlights
• Grocery sales up 0.2% in H1
> There was trong growth in Q2 of 3.8% as lockdown comparatives eased, market price inflation accelerated, customers responded well to the strength of the group's offer, and the supermarket benefited from the warm weather.
> Grocery sales were 9.3% higher than H1 2019/2020
• Statutory group sales (excluding VAT) was up 4.4%. Like-for-like sales (excluding fuel) down 0.8%, with Q2 up 3.7% after a decline of 4% in Q1
Profit highlights
• Retail operating profit fell by 9%, reflecting the group's investment in value, reduced grocery and general merchandise volumes post-pandemic and higher operating costs, partially offset by a higher fuel contribution
• Underlying profit before tax dipped by 8% to £340m
CEO Simon Roberts (pictured) commented, 'Two years ago we launched our plan to put food back at the heart of Sainsbury’s. We committed to improve shareholder returns by creating a simpler business and reducing costs to invest in lower prices, food innovation and maintaining colleague and customer satisfaction.
'We have grown market share in both grocery and general merchandise and investment in our stores and colleagues is supporting leading supermarket customer satisfaction and availability. Profits are significantly higher than pre-Covid levels and we are generating strong cash flow, supporting debt reduction and dividend payments.'
Simon said that the group really undertands how tough it is for millions of households right now. He continued, 'Customers are watching every penny and every pound and we know that they are relying on us to keep food prices as low as we can. We will have invested more than £500 million by March 2023 in keeping prices lower by cutting our costs at a faster rate than our competitors, meaning we have more firepower to battle inflation.
'Over the past year and a half we have consistently passed on less price inflation than our competitors and I am confident we have never been better value. Argos is also performing well in a market where customers are looking for reassurance that they are getting great value and availability.
Simon ended, “We were the first supermarket to give our colleagues a second pay rise this year and have invested £150 million to support them and drive outstanding service. I want to thank all my colleagues for their hard work and dedication and for everything they are doing to deliver for our customers.
'Our strong results are testament to the outstanding commitment and contribution from every member of our team.”