Sainsbury’s has experienced growth in profits due to an increase in customers opting for larger shopping baskets and premium product ranges.

• In the past 28 weeks up to 14 September, Sainsbury’s recorded a 3.7% increase in underlying retail profits, totalling £503 million.
• The supermarket has achieved significant market share gains, with grocery sales rising by 5% and a notable increase in their “Taste the Difference” range, up by 18%.
• Investment in perceived value, amounting to £1 billion, has been a crucial factor in attracting consumers to Sainsbury’s for larger shopping excursions.
• Sainsbury’s plans to expand further by opening up to 45 new stores, including recent acquisitions, to enhance their market presence.

Sainsbury’s has reported a noteworthy rise in profits, driven by a shift in shopper behaviour favouring larger baskets and premium ranges. Over a 28-week period ending on 14 September, the company’s underlying retail profit increased by 3.7% to £503 million. This growth was accompanied by a 5% rise in grocery sales, indicating strong consumer demand.

A pivotal element of this success is Sainsbury’s claim of achieving the largest market share gains within the industry. A significant contribution to this achievement has been the increased consumer appetite for Sainsbury’s premium range, “Taste the Difference,” which experienced an 18% sales surge in the quarter. This demonstrates a clear preference for higher-quality options among shoppers.

The strategic investment of £1 billion into enhancing value perception appears to be paying dividends. Sainsbury’s asserts that the perception of good value has been instrumental in drawing more customers to its stores for substantial shopping trips. Astonishingly, nearly two-thirds of these bigger baskets include items from the premium range, further underscoring the effectiveness of their value-driven strategy.

Simon Roberts, the CEO of Sainsbury’s, highlighted the strength and momentum in their food business, attributing the brand’s success to a combination of value, quality, and service. Roberts remarked that Sainsbury’s is seeing the most significant premium private label growth in the market, particularly in core fresh food categories. Sainsbury’s ability to outperform the market across full baskets suggests a robust competitive position.

Looking ahead, Sainsbury’s is gearing up for continued robust performance, especially with the festive season on the horizon. The company’s recent acquisition of Homebase and Co-op stores is part of a broader strategy to make quality products more accessible. In terms of expansion, the supermarket giant plans to open approximately 20 new supermarkets and up to 25 convenience stores over the next 18 months. Longer-term, Sainsbury’s expects sustained profit growth, bolstered by increases in Nectar profit contributions and cost savings.

Sainsbury’s is on a growth trajectory, backed by strategic investments and expanding consumer appeal for premium products.