Sainsbury profit increases 5.4%
British supermarket Sainsbury's beat forecasts with a 5.4 per cent rise in first-half profit, helped by the development of its online and convenience stores business, the two fastest growing grocery channels in the UK.
The group, which has enjoyed 31 consecutive quarters of underlying sales growth, is continuing to outshine industry leader Tesco, which last month posted a 12.4 per cent fall in first half UK trading profit.
Asda is due to update on its third quarter on Thursday.
Sainsbury this morning said it made profit before tax and one-off items of £373 million (€465 million) in the 28 weeks to September 29.
That compares with analysts' consensus forecast of £371 million, according to a company poll, and £354 million made in the same period last year.
First half sales rose 4 per cent to £13.37 billion as Sainsbury's outperformed the market, increasing its share to 16.7 per cent, the highest for nearly a decade.
Last month the firm posted better-than-expected second quarter underlying sales growth.
Sainsbury's said online sales grew at over 20 per cent and it opened 49 convenience stores during the period.
"Certainly if you compare our performance with all our major competitors we're doing the best both in sales and profit," Chief Executive Justin King told Sky News.
Industry data has shown Sainsbury sustaining market share gains from rivals into the second half as it also benefits from the success of its "Brand Match" pricing initiative, higher penetration of own-label food ranges and increased sales of non-food products.
The group has also enjoyed a boost to its profile from its sponsorship of the London Paralympic Games.
"Whilst the wider economic situation remains challenging, we are well positioned," said Mr King.
Though Britain is out of recession many retailers are still finding the going tough as consumer spending is held back by wage increases below inflation, which hit a five-month high in October, and government measures designed to cut national debt.
Grocers traditionally cope better in tough economic times thanks to their focus on essential goods, but some of them have also struggled.
Last week an industry survey said British retail sales slowed sharply in October, while Morrisons, posted a 2.1 per cent fall in third quarter underlying sales, highlighting high levels of promotional activity.
Earlier this month electrical retailer Comet collapsed into administration, threatening 6,600 jobs.