Sainsbury's, Britain's second largest supermarket group, forecast strong profit growth in its new financial year as it reported a 1.6% rise for 2023/24, above company guidance, that partly reflected customer wins from rivals.
The group, which has a 15.3% share of Britain's grocery market trailing only Tesco, is seeing success from a strategy of matching discounter Aldi's prices on essential items and providing better prices for members of its Nectar loyalty scheme, financed by taking £1.3 billion (€1.52 billion) of costs out of the business over the last three years.
Profit Performance
It said underlying pretax profit was £701 million (€820.17 million) in the year to March 2, 2024 – ahead of company guidance of between £670 million and £700 million (€783.90 million to €817.80 million) and the £690 million (€807.30 million) made in 2022/23.
'We are confident of delivering strong profit growth in the year ahead. We expect to continue to grow grocery volumes ahead of the market, driving profit leverage,' Sainsbury's said, guiding to retail underlying operating profit of between £1.01 billion and £1.06 billion (€1.18 billion to €1.24 billion), growth of 5% to 10%.
It said its strong momentum in grocery had continued into the new financial year.
Food At The Heart
"We said we'd put food back at the heart of Sainsbury's and that's what we've done," commented Simon Roberts, the UK retailer's chief executive. "Our food business is firing on all cylinders. We have the best combination of value and quality in the market and that's winning us customers from all our key competitors, driving consistent volume market share growth as more customers choose us for their weekly shop and all their special occasions.
Roberts added that as the retailer embarks on its 'Next Level Sainsbury's' strategy, it will "continue to make deliberate, balanced choices to support our customers, colleagues, communities and farmers. [...] The business has real momentum and we're excited by our goal of making good food joyful, accessible and affordable for everyone, every day."
Additional reporting by ESM
