Sainsbury's beats expectations but profits down 18%
Supermarket giant Sainsbury's saw like-for-like sales slide 1.6% while underlying profits fell 18% to £308 million in the first half of the financial year.
But profits were well above market expectations despite the challenging outlook facing all the major supermarkets.
Earlier research from Kantar Worldpanel found Sainsbury's was the only major supermarket chain to see sales rise in the 12 weeks to 11 October, increasing its market share by 1.1% to 16.1% in the process.
Sainsbury's chief executive Mike Coupe said the supermarket's cost savings programme is ahead of plan and he now expects savings of around £225 million by the end of this financial year.
"The grocery retail marketplace remains challenging but Sainsbury's is a great business, run by an experienced management team, supported by talented colleagues and strong values," he said.
"We are making good progress against the strategy we outlined last November. We are delivering volume and transaction growth as customers value our quality improvements and our clearer, simpler message of lower regular prices. "
Mr Coupe added: "To complement our core food offer, we are delivering on our strategy to expand our non-food businesses with further growth in clothing, general merchandise and Sainsbury's Bank.
"Our strategy of investing to ensure customers can shop with us across multiple channels remains a strategic advantage."
Sainsbury's figures will be seen as resilient when compared to the other supermarket giants, as they all struggle to counter the growing threat posed by discounters Aldi and Lidl.
Over the summer, Asda revealed its worst quarterly sales figures in more than 50 years, while Morrisons saw like-for-like sales excluding fuel fall by 2.6% in the 13 weeks to November.
Hargreaves Lansdown equities head Richard Hunter said there was "little doubt" that Sainsbury's was improving on a number of fronts.
"The ferocity of competition shows no signs of abating, particularly from the discounters, whilst food deflation, margin pressure and changing consumer habits all form part of a challenging backdrop," he said.
"Most of the metrics are still showing signs of decline, albeit at a slower pace, most notably underlying sales and profit, along with market share.
"Nonetheless, there are a number of rather more positive aspects to the statement, such as the significant reduction to net debt and the pension deficit, and a focus on cost reduction which is comfortably on track."