Sainsbury’s handed boost but warns over outlook
Supermarket Sainsbury's, which has 14 stores in Northern Ireland, has cautioned over an "uncertain" consumer outlook and highly competitive market ahead of Christmas, as it posted a 20% rise in half-year profits.
The chain, which is pressing ahead with plans for a £12bn merger with Big Four rival Asda, said underlying pre-tax profits rose to £302m in the six months to September 22, up from £251m a year earlier.
On a statutory basis, pre-tax profits dropped 40% to £132m. Sainsbury's saw the summer heatwave boost sales over its second quarter, with like-for-like growth including Argos, but excluding fuel, accelerating to 1%, up from 0.2% in the previous three months. This meant comparable store sales rose 0.6% overall in the half-year.
But the group warned the consumer outlook is "uncertain as we head into our key trading period" and said markets remained "highly competitive and very promotional".
Despite this, Sainsbury's said it remained on track for full-year expectations, with analysts pencilling in underlying pre-tax profits of £634m.
Tesco, which has around 50 stores here, is still at the top of the supermarket share leaderboard with 35.2% of the grocery sector, according to the latest supermarket share figures from Kantar Worldpanel.
It is followed by Sainsbury's (17.3%) and Asda, which has around 17 stores here, at 17.1%.
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Mike Coupe, group chief executive of Sainsbury's, said: "The market remains very competitive and we are transforming our business to meet rapidly changing customer needs."
He added: "We have delivered a solid first-half performance and profit has increased because we have delivered significant Argos synergies ahead of schedule. Sales of food and general merchandise were boosted by the hot summer, but general merchandise margins remain under pressure."
On the planned Asda tie-up, he said the group continued to "engage constructively" with the competition watchdog.