LONDON (ShareCast) - (Sharecast News) - UK supermarket chain Sainsbury's reported a sharp jump in first-quarter like-for-like sales as consumers tucked into its new range of 'Taste the Difference' products including Spanish jamón croquetas.
Sales, excluding fuel, for the 16 weeks to June 21 rose 4.7% compared with 4% in the final quarter of 2024 and 2.9% a year ago, driven by warmer weather which lifted customer spending in food, clothing and the Argos catalogue brand.

Sainsbury's said it continued to expect to deliver retail underlying operating profit of around £1bn and retail free cash flow of more than £500m.

"We have great momentum, growing faster than the market for three consecutive years and we are well set to deliver another strong performance over the summer," said chief executive Simon Roberts.

"More customers are choosing Sainsbury's as their first choice for food, with 30 successive periods of growth in primary customer numbers and market outperformance over Easter. We have gained market share for the third consecutive year, reflecting strong consistent delivery of value, quality and service and excellent availability."

"Sainsbury's made its way onto more customers' shopping lists in the first quarter. It continues to pinch market share off the competition, reaching its highest total in almost a decade," said Aarin Chiekrie, equity analyst at Hargreaves Lansdown.

"Despite the top line moving higher, recent changes to employers' National Insurance and minimum wages are set to bring at least £140m of extra costs this year. Sainsbury's is doing what it can to trim costs throughout the business, including closing its in-store cafes and streamlining behind-the-scenes operations, but the group's guidance still points to full-year underlying retail profits remaining broadly flat at around £1bn."

"Trading, so far, has been promising, and while it's still early in the group's financial year, signs of an all-out price war among the major supermarkets hasn't materialised. If that remains the case through the rest of the year, the current profit guidance looks a touch conservative, so there could be some positive surprises for investors who are willing to remain patient."

Reporting by Frank Prenesti for Sharecast.com

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