Sainsbury's, Britain's second biggest supermarket group, forecast full-year profit towards the upper end of its previously guided range as it reported a 5.9% rise in underlying sales for the Christmas quarter.
The group, which has a 15.5% share of Britain's grocery market, has previously forecast 2022-23 underlying pre-tax profit of between between £630 million (€713 million) and £690 million (€780.1 million). It made £730 million (€826.2 million) in 2021-22.
Prior to the update analysts were on average forecasting £644 million, according to a company compiled consensus.
Read More: Sainsbury's Third Quarter Results – What The Analysts Said
Sainsbury's said total sales over the 16 weeks to January 7, excluding fuel, rose 5.2%, reflecting inflation and "relatively resilient volume trends."
It said grocery sales rose 5.6%, while general merchandise sales increased by a better-than-expected 4.6%.
During the six weeks to 7 January – the key Christmas period – grocery sales rose 7.1% while general merchandise sales were up 7.4%, Sainsbury's said.
'Stronger Volume Trends'
"Investment in value, innovation, service and product availability delivered stronger volume trends across grocery and general merchandise, particularly at Christmas," said chief executive Simon Roberts.
"Our determined focus on delivering the best value alongside new and exciting festive food plus outstanding customer service and availability meant we delivered record sales, and market outperformance at both Sainsbury’s and Argos."
The retailer expects to generate retail free cashflow of around £600 million, ahead of its previous guidance of at least £500 million.
UK consumers face the prospect of an even tighter squeeze on their finances in 2023, with higher taxes and mortgage rates and scaled back government support on household energy bills.
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