J Sainsbury plc has raised the lower end of its full-year profit guidance after a first half of volume growth, market share gains and rising profits. The group now expects underlying operating profit from continuing operations of £1,025m–£1,065m.
The results cover the 28 weeks to 12 September 2026. Underlying operating profit rose 3.6% to £525m, and free cash flow increased by £57m to £333m. For BHETA members, the results show a retailer that is investing heavily in stores, ranges and digital channels. They also give an early view of how Argos is positioning itself ahead of its sale to Swift Partners.
More shoppers, more volume
Sales from continuing operations, excluding fuel, rose 2.6% to £14.0bn. Grocery sales grew 2.9% to £13.2bn, driven by volume rather than inflation. Sainsbury’s reported further gains in market share and in main-shop customers.
Investment in stores and ranges
The group invested in more than 170 stores during the half. It added an average of 1,500 new products per store where space was reallocated, and said stores that received investment are outperforming the rest of the estate on sales growth. Two new supermarkets opened, both converted from former Homebase sites, along with 14 convenience stores. Around ten supermarkets and 25 convenience stores are planned for the full year. Sainsbury’s also expects more than 2,000 new and improved products this year, its biggest innovation programme to date.
Online growth
Groceries Online sales rose 9.0%, with growth in both order numbers and average basket size. Sales through OnDemand, the group’s rapid delivery service, climbed 27%.
Non-food: smarter ranges
Sainsbury’s is deliberately giving less space to general merchandise, and its sales in that area fell 5% as a result. The approach of fewer, better products is showing results: toys sales rose 13% following last year’s range reset. The Tu clothing brand outperformed the clothing market and had its best-ever back-to-school season, with sales up 8%.
Argos: marketplace expansion ahead of sale
Argos sales dipped 1.8% amid a competitive market and slower big-ticket demand during the summer heatwave. Its full-year trading profit is still expected to be in line with or ahead of last year. Argos has launched a marketplace and plans to add 200,000 marketplace and supplier direct-fulfilled products by the end of the financial year. The sale is due to complete by the end of February 2027.
Partnerships with suppliers
Chief Executive Simon Roberts said long-term relationships with suppliers give producers “a predictable profit and the confidence to invest and plan for the future”. The group’s retail media arm, Nectar360, delivered more than 600 campaigns for around 100 clients. Its in-store digital screen network is expanding from 3,500 to around 5,000 screens by the end of the year.
What does mean for suppliers?
- Steady demand: Shoppers are buying more by volume despite cautious spending, which points to stable underlying demand at major grocers.
- Store investment: Ongoing store openings and refits create opportunities for well-performing ranges, though competition for space is high.
- Growing channels: Online, rapid delivery and Argos Marketplace are all growing routes to market.
- Retail media: Nectar360 is becoming an increasingly important tool for brand visibility.
