Supermarket Sainsbury’s said it experienced a boost to profit in its half-year results, thanks to higher grocery sales – and its CEO said it was well-placed for Christmas despite supply chain uncertainty.
For the 28 weeks ended 18 September, the grocer reported underlying profit before tax of £371m, up 23 per cent versus the first half of 20/21 and up 56 per cent on 19/20. This was driven by higher grocery sales and effective cost reduction programmes, particularly at Argos.
It said it had made “good progress” with its ‘food first’ priority and had significantly improved its value versus competitors.
Grocery sales jumped 0.8 per cent and the supermarket gained market share, thanks to consumers still opting to eat at home more.
The firm delivered strong digital sales of £5.8bn, 39 per cent of total sales.
It proposed an interim dividend of 3.2p and said it anticipated reporting underlying profit before tax of at least £660m in the financial year to March 2022.
Chris Daly, CEO of the Chartered Institute of Marketing, said the upbeat results prove the grocer has “successfully overcome supply chain issues in the short term at least.”
The supermarket giant’s public advocacy and support of global efforts to combat climate change has been well received, especially in the build up to COP26,” he added.
“However, with 63 per cent of consumers believing that many brands only get involved with sustainability for commercial reasons – as opposed to ethical ones – Sainsbury’s must be mindful to avoid accusations of ‘corporate grandstanding’ or greenwashing.
“If Sainsbury’s is to continue winning the hearts and minds of consumers, it must ensure its commitments are perceived as authentic and carefully tow the line between intentions and tangible actions.”