Sainsbury’s has raised its full-year profit guidance after reporting a 3.6 per cent rise in underlying operating profit to £525m, as grocery sales growth and market share gains boosted its first-half performance.

It reported a 2.6 per cent increase in sales excluding fuel to £14bn for the 28 weeks to 12 September, with grocery sales climbing 2.9 per cent to £13.2bn, driven by continued volume growth.

Underlying pre-tax profit rose 5.2 per cent to £366m, while like-for-like sales excluding fuel increased 1.9 per cent.

However, Sainsbury’s swung to a statutory loss after tax of £164m, compared with a £155m profit a year earlier, primarily reflecting losses relating to discontinued operations, including Argos.

It has now raised the lower end of its full-year underlying operating profit guidance for continuing operations to £1.025bn, up from an equivalent £965m previously, while maintaining the upper end at £1.065bn.

Sainsbury’s chief executive Simon Roberts said: “We know many households are finding things tough at the moment and we’re making it easier for customers to enjoy good food every day, whatever their budget.

“That’s why more people are choosing us for their weekly shop, driving continued volume growth in the first half.”

The grocer said its investment in value through Nectar Prices and Aldi Price Match had helped it maintain a competitive position, while its premium Taste the Difference range delivered sales growth of more than six per cent.

Fresh food sales climbed 4.3 per cent, supported by changes to product ranges and store layouts, while online grocery sales rose nine per cent and on-demand delivery sales surged 27 per cent.

Sainsbury’s also continued investing in its store estate, upgrading more than 170 stores during the period and opening two supermarkets and 14 convenience stores.

It expects to open around 10 supermarkets and 25 convenience stores across the full financial year.

Meanwhile, its general merchandise and clothing business continued to face pressure, with sales falling 3.4 per cent to £777m.

Tu clothing sales declined two per cent amid a subdued fashion market, although the retailer said it outperformed the wider clothing sector and delivered an eight per cent increase in back-to-school sales.

Sainsbury’s is preparing to offload Argos to Swift Partners, with the transaction expected to complete by the end of February 2027.

Argos sales fell 1.8 per cent during the half, reflecting a competitive market and weaker demand for big-ticket products, particularly furniture.

The disposal forms part of Sainsbury’s strategy to sharpen its focus on food retailing, with the supermarket also on track to deliver £1bn in cost savings under its three-year Next Level programme.

Roberts added: “As we progress the sale of Argos and further sharpen our focus on food, we are building a simpler, more focused Sainsbury’s.

“With great value, outstanding quality and exciting new food across our ranges, we’re looking forward to helping customers enjoy a really special Christmas.”

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