Good food for all of us

Annual Report and

FinancialStatements 2026

Strategic Report

Contents

Strategic Report

1 Our purpose

4 Chair’s letter

5 Market context

6 Business model

7 Business overview

8 Chief Executive’s statement

10 Our purpose in action

12 Strategy overview

13 Delivering on our outcomes

18 Key performance indicators

20 Our people and culture

24 Engaging with our stakeholders

30 Plan for Better

34 Financial review

40 Principal risks and uncertainties

48 Statement of viability

50 Non-financial and sustainability information

statement

Governance Report

53 Introduction to the governance report

54 Governance at a glance

56 Board of Directors

58 Board roles and responsibilities

59 Governance framework

61 Board leadership and Company purpose

64 Section 172 statement

65 Board stakeholder engagement

66 Board effectiveness review

67 Nomination and Governance

Committeereport

71 Corporate Responsibility and Sustainability

Committee report

73 Audit Committee report

81 Annual statement from the Remuneration

Committee Chair

83 Summary of 2025/26 remuneration

84 Summary of 2026/27 remuneration

85 Remuneration in context

87 Remuneration Policy

94 Annual report on remuneration

104 Climate change and Task Force on Climate-

related Financial Disclosures (TCFD)

116 Climate Transition Plan

120 Directors’ report

Financial Statements

126 Statement of Directors’ responsibilities

127 Independent auditor’s report to the

membersof J Sainsbury plc

135 Consolidated income statement

136 Consolidated statement of comprehensive

income/(loss)

137 Consolidated balance sheet

138 Consolidated statement of changes inequity

139 Consolidated cash flow statement

140 Notes to the consolidated financial statements

198 Company balance sheet

199 Company statement of changes in equity

200 Notes to the Company financial statements

203 Alternative Performance Measures (APMs)

207 Additional shareholder information

209 Useful contacts

210 Glossary

When John James and Mary Ann Sainsbury opened the

first Sainsbury’s in 1869, they set out to bring customers

high quality food at great value.

For more than 150 years, we’ve stayed true to these values. People who shop with us

know that Sainsbury’s stands for quality, value and service and we are incredibly proud

of the business we have built with our colleagues and partners.

Today, good food sits at the heart of all that we do. Our purpose is to make good food

joyful, accessible and affordable for everyone, every day. It is also our brand promise:

good food for all of us.

At Sainsbury’s we believe good food means thinking about how food is grown,

produced, bought, sold, distributed, cooked and enjoyed in communities across the

UK. We want to inspire people to fall in love with cooking and eating good food by

making it easy, affordable and joyful.

Financial highlights

Retail sales growth

4.3%

(excl. fuel) versus the 2024/25 financial year.

Including fuel, sales increased 2.8%

Total underlying profit before tax

£718m

up 1.3% versus the 2024/25 financial year

Total underlying basic earnings per share

22.3p

up 3.2% versus 21.6p in the 2024/25 financial year.

Basic earnings per share 17.3p versus 10.9p in the

2024/25 financial year

Retail free cash flow

£574m

up 8.1% versus £531 million in the 2024/25 financial

year. Statutory net cash generated from operating

activities from continuing operations was

£1,774million, versus £802 million in the 2024/25

financial year

Retail underlying operating profit

£1,025m

down 1.1% versus the 2024/25 financial year

Statutory profit after tax

£393m

up 55.3% versus the 2024/25 financial year

Return on capital employed

8.9%

down 10 basis points versus the 2024/25

financialyear

Joyful

Accessible

Affordable

Good food for all of us

Strategic Report

We have a real passion for innovation and good quality,

affordable food is the foundation of all our Sainsbury’s

own brand ranges. It’s food that’s well sourced, grown

sustainably and offers great value.

Now 25 years old, our premium Taste the Difference

range is more popular than ever, with customers choosing

it for exciting new flavours and the feeling of dining out

at home. We’ve recently expanded the range with our

new Taste the Difference Discovery collections that offer

expertly created, restaurant-quality meals and premium

speciality ingredients.

1,200

new own brand products, around 50 per cent

in our premium Tastethe Difference range

£2bn+

in Taste the Difference sales,

a milestone for the brand

69%

of customers shopped both Aldi Price Match

andTastethe Difference in the same trolley

overthecourseof theyear

See our purpose in action on page 10 for more information

on how we’re making good food joyful

Joyful

Our purpose

Whether it’s the big weekly shop, a quick bite to

eat or a special occasion, our customers choose

us for good food that is trusted on quality and

delivers on taste.

Strategic Report

1 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsGovernance ReportStrategic Report

See our purpose in action on page 10

We’re opening new supermarkets and convenience

storesin key locations and are increasing food space in

many of our existing stores, so that more customers can

access more of our good food, more often. Alongside this,

our convenience formats, online grocery, rapid delivery

and same-day fulfilment give customers even more

flexibility – supporting everything from larger planned

shops to quick top-ups when time is tight.

We also recognise that good food isn’t shared equally.

We’ve partnered with Comic Relief for over 25 years

andsince 2022 we’ve refocused our relationship to tackle

the issue of food poverty. To date, we’ve donated over

60million meals, raised more than £26 million and

supported more than 2.4 million people. We’ve funded

food clubs, holiday programmes and community support,

while also rallying partners, government and industry

todrive wider change.

40+

new supermarkets and Local stores in key locations

£30m

goal to be raised by 2030 for Comic Relief

1,320

schools supported through our partnership with the

Department for Education’s breakfast clubs programme

Our purpose continued

Accessible

Through our largest investment

in store expansion in over a decade,

we’re bringing more choice,

convenience and quality to more

communities across the UK.

2 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsGovernance ReportStrategic Report

Affordable

See our purpose in action on page 10

Our purpose continued

Championing good food means

making sure great quality is

affordable for everyone, every

timethey shop with us. We know

customers want food they can trust,

enjoy and feel good about – without

worrying about the price – and we

are committed to offering great value

on the products they buy most often.

We’ve invested around £1.3 billion to keep prices low

andmake good food affordable for everyone, whether

that’s through our Low Everyday Prices, Aldi Price Match,

Nectar Prices, personalised Your Nectar Prices or Stamford

Street, our lowest priced range – offering great value on

everyday essentials.

In 2024, we became the first retailer to extend Aldi Price Match

across our supermarkets, convenience stores and online and

the offer contains at least 75 per cent Healthy and Better for

you products. Customers are now saving more than £450 on

average a year with Nectar, as well as collecting over £170 of

Nectar Points through our well-established value proposition

of Nectar Prices, Your Nectar Prices and Nectar Points earned

across a coalition of partners.

£1.3bn

invested in keeping prices low over the past five years

£5.5bn

saved by customers since the launch of

Nectar Prices in April 2023

£450

on average a year saved by households using

Nectar Prices and Your Nectar Prices

10,000+

products available on Nectar Prices

3 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsGovernance ReportStrategic Report

Chair’s letter

Sainsbury’s plays an important role in the UK. Every week, millions

of customers choose us for good food at great prices. Thousands of

suppliers work with us as trusted, long-term partners and around

140,000 colleagues build their careers with us. When Sainsbury’s is

thriving, the impact is felt well beyond our stores, in communities

across the country.

Over the past year, customers have continued to make careful

choices, with value firmly front of mind. Against this backdrop, our

priorities remain clear: supporting colleagues, staying close to what

customers are telling us and delivering great value on the products

they buy most often, while making balanced choices that protect

the long-term strength of our business.

Making balanced choices

Through disciplined execution, a sharper focus on value and

astronger financial position, we have built a business that is more

focused and better placed to serve customers and communities

across the UK over the long term.

Central to this progress is our focus on food, where we can have

thegreatest impact. By prioritising value, quality, availability

and service and investing carefully where it matters most, we

are better able to support our customers today while continuing

to strengthen the business for the long term. By making balanced

choices, we have strengthened Sainsbury’s position as a stable

and trusted UK plc.

Delivering with purpose

We are committed to delivering for everyone who relies on

us.Over the past year, this has meant prioritising value for

customers, continuing to invest in colleagues and working in

partnership with suppliers to strengthen our food supply chain.

Our purpose – making good food joyful, accessible and affordable

for everyone, every day – shapes the choices we make. Through our

Plan for Better, we support healthier and more sustainable diets,

while engaging constructively with government on issues such as

affordability, supply chain resilience and regulatory reform.

Long-term partnerships are essential in our food supply chain.

I recently visited a farm growing salad crops where the challenges

facing British agriculture were clear. I came away with a strong

sense that resilience increasingly depends on farmers having the

confidence – and the capability – to plan and invest for the long

term. Extreme weather is increasing complexity but long-term

agreements give farmers the confidence to invest in solutions

such as water storage and irrigation – a practical example of how

Sainsbury’s is supporting the future of UK food production.

A thriving Sainsbury’s is good for

the UK – for the customers and

communities we serve every day

and for the shareholders who rely on

us for sustainable long-term value.

Martin Scicluna

Chair

Creating long-term

value for the UK

Creating sustainable returns

forshareholders

We are committed to creating long-term value for shareholders.

This year, we returned over £800 million to shareholders through

aprogressive dividend, a £250 million share buyback and a special

dividend from the disposal of our banking operations. This

transaction marked the conclusion of Sainsbury’s ownership of

the Bank’s Core Banking business. I would like to thank Bláthnaid

Bergin, Robert Mulhall and their teams for making this happen.

Looking ahead, we are focused on serving customers’ evolving

financial services needs through a simpler proposition, building

on the strength of our customer relationships while keeping our

core emphasis firmly on food retail. This focus allows us to keep

investing in value, quality, availability and service for customers,

alongside investment in colleagues, stores and technology.

Looking ahead with confidence

I would like to thank colleagues across Sainsbury’s for the

exceptional leadership and commitment they have shown

thisyear. Whether serving customers in our stores, supporting

our supply chains or driving progress behind the scenes, your

contribution is fundamental to the strength of our business.

I am also grateful to Simon and the Operating Board for their

leadership and I am pleased to acknowledge Simon’s CBE in the

2026 New Year Honours, recognising his outstanding contribution

to retail and our business. Under his leadership, colleagues,

customers and shareholders can have confidence in Sainsbury’s

ability to make the right long-term choices.

We welcomed Katie Bickerstaffe and Steve Hare to the Board

following their appointments at the 2025 AGM. They have

brought valuable experience and perspective. I would also

liketo acknowledge Adrian Hennah in his first year as Senior

Independent Director and the counsel he continues to offer.

A thriving Sainsbury’s is good for the UK - for the customers and

communities we serve every day and for the shareholders who

rely on us for sustainable long-term value. With a clear strategy,

disciplined execution and a continued focus on value, quality,

availability and service, Sainsbury’s is well placed to navigate an

increasingly uncertain external environment in the years ahead.

Martin Scicluna

Chair

22 April 2026

Financial StatementsStrategic Report Governance Report4 J Sainsbury plc Annual Report and Financial Statements 2026

Market context

Customers are shopping with intent. Value remains

avery important factor in decision-making but it is

increasingly defined by a balance of price, quality

and trust. Customers are making more considered

decisions, favouring retailers and products that offer

transparency, reassurance and consistency

alongside competitive pricing.

Shopping habits continue to evolve as customers

spread spend across different missions. At the same

time, customers are visiting fewer shops since the

pandemic, placing greater value on getting everything

they need in one place and on a more effortless shop.

The main shop remains critical – particularly for

families and older households who plan ahead and

manage spend carefully.

Customers are also continuing to enjoy food at

home. More meals at home are being treated as

special occasions, with customers increasingly

celebrating and recreating restaurant-quality

experiences in their own kitchens, while still relying

on simple, affordable ways to make everyday meals

feel special. This is supporting demand for products

that combine quality, taste and value, reinforcing

theimportance of strong own label ranges, reliable

availability and clear value cues.

Across all missions, customers expect retailers to

make shopping straightforward and dependable

– through clear pricing, simpler choices and

confidence that what they need will be available

when they shop.

Longer term demographic trends continue to shape

customer needs. The UK population is ageing and

households are becoming smaller. These shifts

influence how people shop, the missions they

prioritise and the products they choose.

Younger generations are accounting for a growing

share of grocery spend, as more of their purchasing

power shifts into grocery and their habits shape

where growth is emerging. These customers are

digitally confident, move easily between channels

and expect joined up, relevant experiences - whether

in store, online, or on their phone.

Health is playing a growing role in food choices

across all age groups. As cultural diversity increases

and the population ages, health needs are becoming

more varied and more people are living longer with

multiple co-existing chronic conditions - adding to

the complexity of the health landscape. Customers

want food that supports healthier lifestyles without

added cost or complexity. Interest in nutrition, balance

and functional benefits is growing, alongside awareness

of topics such as ultra processed foods and emerging

trends like GLP 1 usage. Together, this reinforces a longer

term shift towards fresh food and balanced diets.

Alongside this, customers increasingly expect brands

to do good - from cutting food waste and reducing

packaging to supporting more sustainable diets and

playing an active role in local communities.

Technology is playing an increasingly important role

in shaping customer expectations. Customers expect

retailers to use digital tools and data to make shopping

simpler, quicker and more relevant – from personalised

offers and inspiration to smoother online journeys

and better availability.

For retailers, continued investment in data, technology

and infrastructure is a key differentiator. Those with

the scale and financial strength to invest are well

placed to improve efficiency, unlock productivity and

deliver intuitive and tailored customer experiences.

Technology is also creating new opportunities through

loyalty, retail media and emerging AI-enabled services,

increasing the value of trusted customer relationships

and high-quality data. In a competitive market, the

ability to combine great food, strong value and digital

capability remains central to long-term success.

Physical stores continue to play a central role in

theUK grocery market. The weekly shop remains

especially important for households planning ahead

and managing budgets, reinforcing the importance

of well-located stores and customer service.

Growth is also being driven by customers having

more ways to shop. Convenience formats, online

grocery, rapid delivery and same-day fulfilment are

helping customers meet different needs across the

week. While these channels still represent a smaller

share of total grocery spend, digital channels in

particular are contributing a significant share of

growth and are shaping expectations around

speed,ease and availability.

Across the market, retailers are responding by

takinga more disciplined approach to investment:

maximising value from their existing store estates –

maintaining standards, improving availability and

delivering a consistently good customer experience

– while also increasing spend on technology,

automation, supply chain capability, data and AI.

Together, these investments are designed to drive

efficiency and productivity in operations, while

improving (and increasingly digitising) the customer

shopping experience.

Customer discovery is also changing. Marketplaces,

aggregators and emerging AI-enabled tools are

influencing how people find products and make

choices. Over time, this will increase the importance

of strong digital capability, high quality data and

trusted, direct relationships with customers.

The UK grocery market remains highly competitive, withcustomers facing an increasing

amount of choice on where and how they shop. People are making deliberate choices

about the retailers they rely on, looking for confidence that they can get good quality

and value anda stress-free experience.

This environment is being shaped by a mix of factors: the continued importance of physical stores, the growing role of digital channels and changing expectations

around ease, availability, service and speed of fulfilment. At the same time, retailers are tightly focusing investment on the areas that matter most to customers, with

technology playing a growing role in supporting both customer experience and productivity. Together, these dynamics are influencing how customers shop today and

where growth is emerging across the market.

Where growth is coming from How customers are shopping today Changing lives, changing needs

Making shopping simpler

through technology

5 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

J Sainsbury plc Annual Report and Financial Statements 20266

Our business

at a glance

Sainsbury’s is the country’s second largest

grocer, serving customers online and in

ourmore than 600 supermarkets and

885convenience stores. Our colleagues bring

our purpose tolife in the communities we serve

– making good food joyful, accessibleand

affordable for everyone, every day.

We create value for stakeholders by building on the heritage and scale of our food

business and strong customer offer, enhancing our competitive advantage.

Everything we do is underpinned by data and technology

innovation and the infrastructure that supports our

brands enables us to drive value and efficiency.

Our Plan for Better is integrated into everything we do and critical to building

long-term resilience in our business and across our supply chains. We are

committed to playing aleading role in creating a more resilient and

sustainable UK food system.

Read more on page 30

Business model

Sainsbury’s

brandand own

brand heritage

Reputation for value,

quality andservice

Strength in real estate

and online capability

Scale advantage as

the UK’s second

largest full choice

supermarket

Suppliers and

partners

Colleagues and

our winning

culture

Growing

customer base

6 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Business overview

Our strategy for Next Level Sainsbury’s

In February 2024, we set out our Next Level Sainsbury’s

plan, building on the momentum of our successful

Food First strategy.

It’s our ambition to be the UK’s first choice for food.

We are focused on attracting many more people to

choose Sainsbury’s as the place they come to for

good food and playing a leading role in creating

amore sustainable food system in the UK.

Next Level Sainsbury’s sets out how we will deliver

that ambition. Our ability to combine great value,

trusted quality and leading service is the winning

combination that sets us apart and makes us

uniquely placed to help shape the future of

foodretail.

Over the past two years, we have made strong progress,

strengthening our competitive position and building

real momentum across the plan. We have expanded

and enhanced our world-leading Nectar loyalty

platform, sharpened value, accelerated food

innovation and improved availability and service.

Underpinning all of this is our programme to deliver

another £1 billion of cost savings which will help us to

continue to invest to transform our capabilities and

support sustainable growth in Year 3 and beyond.

Our brands work together toprovide

added value forour customers

Our brands - Sainsbury’s, Argos, Nectar, Nectar360, Habitat, Tu,

Sainsbury’s Bank and Smart Charge - each play a part in delivering

our purpose and giving customers more reasons to shop with us,

while building strong, sustainable growth for our shareholders.

Whether it’s stylish homeware from Habitat, great value fashion

from Tu or the convenience and breadth of choice that Argos offers,

we bring customers more of what they need, all in one place.

Our market-leading retail media and data capabilities are powered

by Nectar360 and our world-class Nectar loyalty platform. Together

with a strong coalition of partner brands, they help us really

understand our customers, enabling us to tailor value and rewards.

Attract many more people

to choose Sainsbury’s as

theplace they come

toforgood food

and play a leading role

increatingasustainable

foodsystemin theUK

Build a world-leading

loyalty platform

that is more personalised, joyful,

rewarding and transparent

foreveryone

Unleash and transform

Argos around the three

things that have always

made it brilliant

like its curated range, famously

convenient experience and great

value – so more customers buy more

complete baskets moreoften

Save £1 billion and invest

intransforming

ourcapabilities

to take another big leap forward

inefficiency, productivity and

customer focus, continuing to build

aplatform for growth

First choice

for food

Loyalty

everyone loves

More Argos,

more often

Save and

invest to win

Sainsbury’s Argos Nectar Nectar360

Tu Habitat Smart Charge Sainsbury’s Bank

Next Level Sainsbury’s strategy

Our investment case

Food volume growth

SG&A/sales reduction

Measured reinvestment in the

customer proposition

Profit leverage from sales growth

Delivering profit leverage

from salesgrowth

Robust profitability

Disciplined capital investment

Strong sustained cash flows

and higher return on capital

Sustainable and reliable

cash generation

Strong sustained cash flows

Focused capital allocation

Enhanced shareholder returns

Enhanced returns to shareholders

Discover more about investing in Sainsbury’s

atInvestment case | J Sainsbury plc

J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

This last year, every conversation with our

customers, colleagues, farmers and suppliers has

reinforced just how much people are weighing up

every decision they make. Against a backdrop of

increasing pressure on the cost of living and

changing shopping habits, it’s a constant reminder

that we must do everything we possibly can to earn

people’s trust and loyalty.

We are focused on making sure our food is great

value, high quality and sourced in partnership with

farmers and producers. As global uncertainty around

us continues, this must remain our absolute priority.

For 157 years, Sainsbury’s has worked in partnership

across our supply chain to make good food joyful,

accessible and affordable for everyone, every day.

It’s a responsibility we take seriously and one that I

believe will continue to setus apart.

By staying true to this purpose and focusing relentlessly

on what matters most to our customers, we’ve delivered

strong results over the last year. We grew food volumes,

gained market share and performed well in a highly

competitive market. We have also delivered enhanced

cash returns to shareholders through dividends and

share buybacks.

Value customers rely on

When I became Chief Executive five years ago,

customers told us we were too expensive and too

often we were inconsistent. We really listened and

set out a clear plan to put food first and at the heart

of everything we do at Sainsbury’s. We committed to

deliver outstanding value without compromising on

the quality and service customers always expect

from us.

Since then, we’ve invested around £1.3 billion

bringing prices down for customers while continuing

to deliver leading quality, welfare and sustainability.

With household budgets remaining under pressure,

we’ve kept greatvalue very firmly at the centre of our

strategy. That’s why more customers are choosing

products from Aldi Price Match alongside Taste the

Difference in their weekly shop – confident they’re

getting great value on everyday essentials and

quality food for special occasions.

We have a strong

plan powered by a clear

purpose. Good food guides

everything we do and we will

keep using our scale, our

reach and our capabilities to

make good food joyful,

accessible and affordable

for everyone, every day.

Simon Roberts

Chief Executive

Putting good food at

theheart of all we do

This year we took Nectar loyalty to the next level,

rolling out Your Nectar Prices across all supermarket

checkouts, giving more customers access to

personalised savings wherever and however they

shop, while continuing to invest in Aldi Price Match

on the products they buy most often. Together,

Nectar Prices and Your Nectar Prices now help

millions of households save around £450 a year.

Food that’s affordable, accessible

and joyful

We want to inspire more people to enjoy cooking and

eating good food. This means adding more fibre and

flavour to everyday favourites and celebrating fresh,

seasonal cooking that is always tasty, exciting and

accessible. Alongside this, I am proud to say that we

continue to lead on transparency, supporting clearer

food standards and mandatory reporting, so that

customers can make confident, informed decisions

for themselves and their families.

Supporting thousands of communities right across

thecountry is at the core of who we are. Through our

partnership with Comic Relief, we’ve provided more

than 60 million meals since 2022. I’ve seen first-hand

how much this matters, including recently at a local

food club in South London where volunteers told me

that reliable, long-term support makes the biggest

difference. No child or family should go without the

essentials they need to thrive and we’re committed

to playing our part in reducing food poverty across

the UK. This year we have donated £8.7 million through

the partnership with Comic Relief and through Alliance

Food Sourcing we’re working with the retail industry to

find new ways to rescue surplus food in supply chains

and ensure it reaches those that most need it.

Chief Executive’s statement

Financial StatementsStrategic Report Governance Report8 J Sainsbury plc Annual Report and Financial Statements 2026

Farming in partnership

We believe food resilience matters more now than ever

and that’s why our long-term partnerships with farmers

and suppliers are so vital, securing good food for the

future and building a more sustainable UK food system.

This important work starts with understanding the real

challenges our farming partners face. Successive

periods of volatility in an already tough market are

making it harder for farmers to plan, invest and

innovate with confidence.

This March, we announced that we’re further expanding

our long-term partnership model, to create one of the

UK’s most extensive networks of multi-year farming

agreements. More than 2,500 British and Irish farms

will be backed by long-term contracts of between five

and ten years, giving farmers real confidence in what

we will buy from them and the profit they can expect

to make, with a long-term commitment to work

together. This represents over £5billion of committed

investment over the lifespan of these agreements

and will secure 3.1 million tonnes of homegrown

fresh food.

Jobs, skills and opportunity

With around 140,000 colleagues across the UK,

wecreate opportunities in every community we

serve. Iregularly meet colleagues across Sainsbury’s

and Argos who began their career in weekend roles

and now lead teams. Starting work with a weekend

job provides such a positive start to working life and

we are committed to doing all we can to provide

thebest opportunities for young people, including

through the relaunch of our graduate programme

this year.

We continue to prioritise significant investment

incolleague pay because it is the right thing to do,

supporting the wellbeing and success of our people

through competitive rates of pay and a strong

benefits package. We have increased pay for our

hourly paid colleagues by more than 40 per cent in

the last five years and our market leading benefits

include a competitive pension scheme, colleague

share plans, free food during shifts and leading

levelsof colleague discount.

Looking ahead

We continue to deliver strong momentum and

progress through our Next Level plan, building a

Sainsbury’s that is better for today and well placed

for the future. We’re doing this through continuing

to invest in what matters most for our customers,

championing good food by supporting our colleagues

and working in partnership with farmers and suppliers.

This disciplined approach allows us to make balanced

choices, strengthening our business and creating

long term, sustainable value for shareholders.

We are well placed to navigate the challenges of

uncertain global events and the potential for volatility

around us. We have a strong plan powered by a clear

purpose and an experienced and capable leadership

team energised and focused for the yearahead.

A huge thank you to our entire Sainsbury’s team for

their hard work, commitment and care. It’s our team

who make everything we achieve possible and it’s

each and every one of our colleagues who make the

difference, doing the right thing for our customers

every time they shop with us.

Simon Roberts

Chief Executive

22 April 2026

Learn about how we’re bringing more of our range to more customers on page 13

Learn how our long-term agreements

with farmers are helping to deliver our

purpose on page 10

Discover how we’re delivering

outstanding value on page 13

Chief Executive’s statement continued

9 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Our purpose in action

We recently announced a renewed commitment to

long-term partnerships with British and Irish farmers,

expanding our long-term partnership model to create

one of the UK’s most extensive networks of multi-year

farming agreements. More than 2,500 farms will be

backed by long-term contracts, representing over

£5billion of committed investment over the lifespan

of these agreements, securing 3.1 million tonnes

ofhomegrown fresh food.

These long-term partnerships are essential to protecting

the future of good food for customers today and for

generations to come, because the only way to secure

more British food and deliver value for customers is

togive farmers certainty over what we’ll buy, at what

price and for how long. Genuine collaboration, shared

ambition and long-term commitment across the system

are essential and customers want to buy produce which

supports farmers across the UK and Ireland.

Read more about how we’re

strengthening the future of good

food in the UK on our website

To keep our business resilient, we need the

confidence to invest in our future. That’s why

long-term partnerships, like the one we have had

with Sainsbury’s for many years, are so important

and vital to securing the future of the food system

and British farming.

Charlie Burgoyne

Dairy farmer,

Holmbush Farm,

whohassupplied

Sainsbury’s milk for

over 15 years

Good food starts here!

At Sainsbury’s we believe good food should be

good quality, well sourced and produced responsibly,

taste delicious and offer great value – something

everyone can enjoy in communities across the UK.

2,500

British and Irish farms

supported with

long‑termagreements

£5bn+

committed investment

in British and Irish agriculture

Good food is something

peopledepend on every day.

Inuncertain times our focus is

on keeping food great value for

customers while giving farmers

the reassurance and certainty

they need to plan ahead.

Simon Roberts

Chief Executive

Supporting UK farming

10 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

We want to inspire people to fall in love with cooking

and eating good food by making it easy, affordable

and taste delicious. This is why we’re passionate about

making sure that everyone can enjoy good food and

have long-supported efforts to help customers eat

well. We have a decades-long heritage of helping

make nutritious food tastier, simpler and easier

foreveryone, from offering more transparency on

product packs by being the first UK supermarket to

introduce traffic light labelling to rewarding customers

who eat well through Nectar challenges.

But we know eating well remains a challenge for

many people. Stretched budgets, busy lives and

conflicting advice all get in the way.

Read more about how we’re resetting our healthy

diets strategy in our Plan for Better report – this

isakey step in helping customers overcome

thesechallenges

Launching new products to

givecustomers convenient and

delicious ways to eat well

As part of our continued focus on food innovation,

every year we launch new products – created in close

collaboration with our expert nutritionists and packed

with the essentials our diets need – to give customers

convenient and tasty ways to eat well.

This year, we launched our new Small But Mighty range.

It features nutrient dense meals, each designed to be

less than 400 kcals, high in protein, asource of fibre

and one of your five a day. Alongside this we’re

launching a selection of High Protein products

including yoghurts, bread and ready meals.

We understand people have

different nutritional needs,

appetites and tastes and that

continues to guide how we develop

our products. From protein packed

breakfasts and ready-to-go lunches to smaller,

nutrient rich meals, our new High Protein and

Smallbut Mighty ranges are designed to offer

people convenient, delicious food that they can

enjoy withconfidence, day in and day out.

James Campbell

Sainsbury’s Director of Fresh Product Innovation

No child or family should go

without the food they need to

thrive. Yet too many parents are

making impossible choices and too

many plates are empty. At Sainsbury’s,

we believe everyone should have access to good

foodand no child should go hungry. Since 2022,

ourpartnership with Comic Relief has helped deliver

millions of meals and vital community support. And

with our renewed commitment, we’re determined

tokeep going, together.

Ruth Cranston

Sainsbury’s Director of Sustainability

For some of us, food and mealtimes

sit at the heart of our happiest

moments, but for so many across

the UK they remain the source of

enormous worry. Comic Relief’s

partnership with Sainsbury’s is focused

on ensuring that no one has to make difficult

choices when it comes to feeding themselves

or their family and that everyone can experience

thecomfort and connection often associated

with good food.

Samir Patel

CEO of Comic Relief

Our purpose in action continued

Our focus is on ensuring no child or family goes

hungry, helping them access the good food they

need to grow – today and for the long-term.

Partnering with the Department for Education on

their free breakfast club programme in October, we

supported up to 180,000 school children across the

UK. The initiative provided 750 early adopter schools

with access to £200 gift cards to help them take their

free breakfast club offer further - increasing their

funding for healthy, affordable and nutritious food.

We also committed to supporting over 570 additional

schools from April 2026 onwards.

Over the festive period, we also raised over £3.9 million

for Comic Relief. This included donating every penny

from the sales of by Sainsbury’s and Free From classic

mince pies in December to provide over five million

meals to families over Winter in 2025/26.

£8.7m

donated to Comic Relief this year

120,000

holiday club places funded with Comic Relief

through the UK Government’s Holiday Activities

andFood (HAF) programme

1,320

schools supported through our partnership with

theDepartment for Education’s breakfast club

programme, reaching 280,000 children

25+ years

of partnership with Comic Relief

Helping our customers find the joy of good food Tackling food poverty in partnership

11 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

We’ve invested to support our customers, our

colleagues, our farmers and our suppliers and we

have sustained our strong competitive position in an

intensely competitive market

. More customers are

trusting us to deliver our winning combination of

value, quality, availability and service. As a result, we

have delivered food volume growth ahead of the

market for the sixth consecutive year, reaching our

highest volume market share in ten years

The underlying profit leverage from this volume

outperformance was offset by investment in our

competitive position and by unusually high levels of

operating cost inflation, only partially mitigated

through the delivery of a further £330 million of

structural cost savings. We delivered Retail free cash

flow of £574 million, ahead of our expectations and

we remain on track to exceed £1.6 billion over the

three-year plan. Whilst maintaining that cash flow

commitment, we’re investing for future growth and

to further strengthen our competitive advantage. We

have also delivered enhanced cash returns to

shareholders, with more than £800 million returned

this year through dividends and share buybacks.

Our progress against the commitments is driven by

four strategic outcomes: First choice for food, Loyalty

everyone loves, More Argos, more often and Save and

invest to win.

Strategy overview

Consistently delivering for customers, colleagues, suppliers

andshareholders

Outcomes What this means

First choice forfood

Read more page 17

Save £1 billion and invest in transforming our

capabilities – taking another big leap forward in

efficiency, productivity and customer focus,

continuing to build a platform for growth

Food volume growth ahead of

the market

Customer satisfaction higher

2026/27 than2023/24

Colleague engagement

higher 2026/27 than2023/24

Deliver our Plan for Better

commitments

Deliver profit leverage from

sales growth

£1 billion cost savings over

three years to 2026/27

1.6 billion+ retail free cash flow

over the three years to 2026/27

Higher return on capital

employed

Progress key

No progress Ongoing On track

Across the business, we are focused on delivering the eight

commitments that we made at the launch of Next Level Sainsbury’s:

Reflecting on our progress two years into the plan, our balanced choices helped us make good

progress against these commitments.

12 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Delivering on our outcomes

First choice for food

In a year where we faced an unusually high level

ofexternal cost pressures and a more competitive

market, we were clear that our key objective was to

sustain our strong competitive position and continue

to outperform the market. We delivered on this,

making balanced choices throughout the year to

maintain our strong value position against all key

competitors

and deliver volume outperformance

inevery quarter

Customers trust us to deliver good food and they

relyon our winning combination of value, quality,

availability and service with more and more shoppers

choosing us for their big weekly shop

. We now have

around 1.2 million more big trolley primary customers

than five years ago

and we continue to benefit from

switching gains from competitors across the

wholemarket

Customers want to access more of our food range

inmore locations, and we are investing to grow our

food footprint by rebalancing space towards fresh

food in existing stores and opening new stores in key

target locations. At the same time, we are going

further to amplify the points of difference in our

customer proposition, with a clear focus on

delivering greater personalisation, improving the

shopping experience both in-store and online and

championing fresh food and innovation.

Our brand and heritage in fresh food set us apart.

Ascustomers increasingly look for healthy and

sustainable options, our reputation for fresh,

nutritious, high quality and well sourced food

meanswe are well placed to be first choice for more

customers. Our consistent delivery of great value at

the centre of the plate continues to drive outperformance

versus the market in key fresh food categories

supported by our continued focus on innovation

andquality.

We are using our scale, reach and capabilities to drive

positive change across the food system and are

working closely with farmers and suppliers to

strengthen the supply of good food, help tackle

climate, nature and labour challenges and raise

animal welfare standards. We are expanding our

long-term partnership model so that by 2027 we will

be supporting more than 2,500 British and Irish

farms with long-term contracts. We have committed

to invest more than £5 billion in British and Irish

farming over the coming years.

c.£1.3 billion invested over the last

five years to deliver consistently

great value

Throughout the year, we maintained our strong value

position against all key competitors

, supported by

the biggest Aldi Price Match in the market, more than

10,000 Nectar Price offers every week, personalised

Your Nectar Prices and Nectar Points offers.

Our value investment continues to focus on centre of

the plate items customers buy most often, including

produce, dairy, meat, fish and poultry, with 17 per cent

more centre of the plate Aldi Price Match products

year on year. This consistent approach to value is

resonating strongly with customers and continues to

drive outperformance in fresh food categories

, where

fresh food sales were up eight per cent.

Championing quality, innovation

and fresh food

Our brand heritage and leadership in fresh food set

us apart. Taste the Difference is now the fastest

growing Premium Own Label in the market

, with

sales ahead of our £2 billion target and Fresh food

sales up 16 per cent. More customers are shopping

bigger Taste the Difference baskets more frequently

and 69 per cent of customers shopped both Aldi Price

Match and Taste the Difference in the same trolley

during the year

We launched more than 1,200 new Own Brand

products during the year, around half of which were

Taste the Difference, including our new restaurant

quality Discovery range. We are increasingly helping

customers make healthier choices, with a growing

focus on fibre rich and higher protein diets. Aldi Price

Match now contains at least 75 per cent healthy and

better for you products.

Investing in colleagues and

customer service

Our commitment to customers is underpinned by

our commitment to colleagues. We continue to lead

the market on overall customer satisfaction in

supermarkets

, with improvements across key

metrics including value for money, product range,

quality and availability

We have invested further in colleague wellbeing,

development, pay and benefits, increasing colleague

pay by more than 40 per cent over the last five years

and continue to achieve high colleague

engagementscores.

Expanding our food footprint

Customers want to access more of our food range in

more locations. We are investing to grow our food

footprint by rebalancing space towards food in

existing stores and opening new stores in key

targetlocations.

During the year we opened ten new supermarkets,

including two Co-op conversions and three

Homebase conversions. Sales to date are ahead of

forecast and we continue to expect strong returns.

We also opened 33 new convenience stores, with

some standout stores delivering sales more than 50

per cent ahead of expectations. In the year ahead,

we expect to open around ten new supermarkets and

at least 20 new convenience stores, adding around

0.5 per cent to sales growth in 2026/27.

Alongside this, our three year ‘More for More’ plan

continues to deliver good progress. Over the last two

years we have invested selectively in 70 supermarkets,

reallocating space towards food and enabling

customers to shop more of our range both in-store

and online. Invested stores are performing ahead of

the rest of the estate, delivering two per cent food

volume growth outperformance in the second half

and improving total trading intensity by more than

five per cent. We will invest in a further 30 stores in

the year ahead.

Delivering for customers however

they want to shop with us

Groceries Online sales increased by almost 13 per cent

supported by rapid growth in OnDemand, where

sales rose 69 per cent to more than £700 million and

we now cover 70 per cent of the UK population. We are

improving the digital journey for our customers by

bringing Groceries Online, Chop Chop and SmartShop

into a single coherent app, creating the foundation

for future personalisation and AI led experiences.

Convenience store sales grew three per cent,

supported by outperformance of new space and

invested stores and improved customer satisfaction

across key metrics, including value for money and

product range

13 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Delivering on our outcomes continued

In focus

Taste the Difference

celebrates £2bn milestone

For 25 years, Taste the Difference has redefined

supermarket food, focusing on products grown and

made with extra care, trusted ingredients and fuller

flavour. That promise still stands today, inspiring

customers to discover new favourites and enjoy

restaurant-quality meals at home.

This year, Taste the Difference passed a major

milestone, exceeding £2 billion in annual sales for the

first time – proof that customers want outstanding

quality at prices that still feel affordable prices.

The shift towards dining out at home continues

togather momentum as going out becomes more

expensive. Worldpanel by Numerator suggests that

over half of all grocery spend is on own label and

Taste the Difference is leading the way as the

fastest growing premium range in the market

InOctober 2025, we launched Discovery, a new

premium collection from Taste the Difference to

help customers enjoy more special occasions at

home, with even more choice.

For more than 25 years,

Taste the Difference has

brought quality and

flavour to households,

earning its place as

atrusted favourite

inBritish homes.

Rhian Bartlett

Chief Commercial and Sustainability Officer

All of our

recipes are rooted

back to authentic

flavours, provenance and

quality ingredients. I am

so proud of how Taste the

Difference has evolved

over the decades.

Viresh Singh

Pilgrim’s Food Masters,

Our supplier partner on the development of our

new modern Indian ready meals, part of the new

Taste the Difference Discovery range

Playing a leading role in a

sustainable food system

We are using our scale and influence to strengthen

the supply of good food and drive positive change

across the food system. By early 2027 we will support

more than 2,500 British and Irish farms through long

term partnerships, with more than £5 billion of

committed investment. By the end of 2026, 60 per

cent

of our own brand produce, meat, fish, dairy

and poultry will be sourced through long

termagreements.

Since 2022, our partnership with Comic Relief has

raised more than £26 million, funding over 60 million

meals and supporting more than two million people.

We have also almost doubled the tonnage of edible

surplus food being donated to local communities,

preventing 11,030 tonnes of surplus food going to

waste, a 49 per cent increase year-on-year.

We have refreshed our Plan for Better commitments

for packaging and human rights. Our new packaging

targets reflect rapid regulatory and structural change

in the UK packaging sector, with a focus on improving

recyclability and circularity. We refreshed our Human

Rights Policy and Saliency Assessment and delivered

training to over 100 colleagues and more than

700supplier representatives. We also launched a new

international programme with Comic Relief to help

strengthen climate adaptation, food security and

resilience in sourcing regions most vulnerable to

climate impacts.

Improving performance in the

products and services that sit

alongside our food offer

Elevated style credentials

and stronger availability

delivered six per cent Tu Clothing volume growth, with

clothing sales up 4.8 per cent and online sales growth

of more than 20 per cent. Tu has outperformed the

Clothing market for seven consecutive quarters

Sainsbury’s General Merchandise sales were down

3.2per cent, primarily reflecting expected volume

decline driven by our strategic choice to allocate

more space to food. We now have an easier-to-shop

customers offer with better everyday value and

product availability, alongside higher trading

intensity at a lower cost to serve.

Our Smart Charge proposition also continued to grow

strongly. We now have 661 ultra rapid electric vehicle

charging bays across 80 stores, with five new locations

added during the year. Sales growth of 136 per cent

was driven primarily by very strong like for like growth,

with more customers shopping with Sainsbury’s while

they charge, shopping more often and benefiting from

using Nectar with Smart Charge.

Use the QR code to read more

about this major milestone

14 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Delivering on our outcomes continued

Loyalty everyone loves

Customers can save more than £450 a year with

Nectar, as well as collecting over £170 of Nectar

Points through our well established value proposition

of Nectar Prices, personalised Your Nectar Prices,

Nectar Offers and Nectar Points earned across a

coalition of partners. Nectar participation reached

itshighest ever level during the year, with digital

engagement strengthening in particular, as

customers recognise the benefits of personalised,

rewarding and integrated loyalty and value when

they shop at Sainsbury’s.

The resulting growth of our loyal, primary customer

base is central to the success of the Nectar360 Retail

Media business, which now supports over 900 clients

and media agencies. We are increasingly well placed

to capitalise on the strong forecast growth of Retail

Media in the UK through the high-returning investments

we are making in our capabilities, and we remain ahead

of plan to deliver at least £100 million of incremental

profit over the three years to March 2027.

Since the launch of Nectar Prices in April 2023,

customers have saved more than £5.5 billion. During

the year, customers saved an average of £15.50 on

an£80+ big weekly shop. Your Nectar Prices is now

available across all supermarket checkouts, having

previously been available only through Online and

SmartShop. This expansion has been a key driver of

record Nectar digital engagement, with a 35 per cent

increase in digitally active users

Setting the standard in retail

media and loyalty services

Brands want to work with fewer, high-quality

networks. We are a partner of choice with reputation

for scaled first-party data, omnichannel reach,

sophisticated closed-loop measurement capabilities

and leading client service.

During the year we launched Nectar360 Pollen,

theUK’s most advanced unified Retail Media

platform, connecting audience insight, planning,

activation, optimisation and measurement in

asingle, easy-to-use platform that facilitates

omnichannel advertising in-store, onsite and offsite.

Client onboarding is well underway, particularly

among our largest grocery suppliers, with excellent

early feedback on the intuitive and forward-thinking

nature of the platform. Clients are benefiting from

real-time audience building AI tools, efficiency gains

from a more streamlined creative compliance process

and market-leading measurement tools that enable

clearer ROI tracking and smarter decision making.

Our connected digital screen network now consists

ofalmost 3,000 screens in supermarkets and

convenience stores, with plans to install a further

3,000 screens during the next year. We are continuing

to develop our Retail Media capabilities, including

exploring further opportunities within SmartShop.

We are also growing the Nectar Coalition, launching

partnerships with Marriott Bonvoy, FareShare and

Deliveroo, alongside reward partnerships with Uber

and Uber Eats, broadening the range of rewards

available to customers and strengthening the

everyday relevance of Nectar.

Personalised value at every

Sainsbury’s checkout

Around 8.5 million more customers can now

accesspersonalised savings when they shop in

oursupermarkets. In July 2025, we rolled out Your

Nectar Prices across all Sainsbury’s supermarket tills

nationwide, taking tailored offers beyond digital

channels so customers can benefit wherever and

however they choose to shop.

How do Your Nectar Prices work?

Your Nectar Prices give customers personalised

discounts on the things they love to buy each week,

chosen just for them based on how they shop at

Sainsbury’s. The more you shop with us, the more

relevant these offers are.

Customers are increasingly trusting us for great

valueon the products that matter most to them,

which is creating greater loyalty and even more

bigtrolley shops – contributing to our ambition

tobecome Firstchoice for food.

In focus

What really sets us apart is

our investment in making

loyalty personal. Shoppers

want to feel recognised and

rewarded and while Nectar

Prices are for everyone, we

know our customers love an

offer that is made just for

them. That’s exactly what

Your Nectar Prices delivers

– it’s about giving

customers those extra

savings on the products

they love and buy most.

Mark Given

Chief Technology, Marketing and Data Officer

I’m really impressed by

how tailored it is to me.”

I know it’s a cliché, but it

makes me feel special.”

£450

annual customer savings

with Nectar

35%

increase in digital

active Nectar users

following this roll‑out

What are customers saying?

15 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Delivering on our outcomes continued

More Argos, more often

We have taken determined action to accelerate the

transformation of Argos, balancing our objective to

improve the customer proposition with structural cost

reduction and greater efficiency in our supply chain.

We continue to invest in strategic initiatives to

strengthen choice, availability and service for

customers and to build a stronger digital proposition,

alongside the launch of Argos Pay, our new flexible

financial services offer. Customer satisfaction

regarding value and range

and brand consideration

both improved

during the year, helping to deliver

growth in customer numbers and volumes. In a highly

competitive and subdued general merchandise

market, this volume growth was largely offset by

pricing pressure and a higher participation of lower

ticket items.

We have also established a dedicated Argos

management team to help accelerate the pace of

change and drive cost reduction, supporting

investments in infrastructure and technology

platforms for Argos.

Encouraging volume performance

offset by lower average selling price

Argos sales increased by 0.7 per cent in the year.

Astrong summer performance was offset by more

subdued consumer spending over the peak Black Friday

and Christmas period. Sales volumes increased by

3.7per cent, driven by higher customer numbers and

bigger baskets but this was largely offset by a three

per cent decline in average selling price, reflecting

competitive pricing pressure and higher participation

oflower ticket items.

Profits were broadly in line with last year, with

thebenefit from higher volumes and operating cost

savings offset by lower Average Selling Price (ASP),

higher cost of driving online traffic and higher wage

inflation. Profits increased year on year in the

firsthalf, reflecting strong Summer seasonal

volume growth but declined in the peak third quarter,

impacted by lower ASP.

Expanding breadth and depth

ofranges

We continued to expand the breadth and depth

ofour ranges to improve customer choice and

relevance. During the year, we added 13,000 new

Supplier Direct Fulfilled products, with a particular

focus on Beauty, Toys and Electricals, driving strong

sales growth. The planned launch of a marketplace

inthe year ahead will further expand choice

forcustomers.

At the same time, we are simplifying and

strengthening our own brand offer by rationalising

Argos owned private label brands from 27 to seven

core brands. The relaunch of Chad Valley and our

design led collaborations within Habitat delivered

positive market share performances across toys and

homewares

, with a 21 per cent improvement in sales

growth in Chad Valley following relaunch.

Investing in efficiency, digital

capabilities and services

We continued to invest in digital capabilities and

added value services to support growth in a highly

competitive digital market. Improvements to the

Argos app are delivering personalised recommendations,

app-only offers and a smoother account set up and

purchasing journey. These changes supported higher

conversion and increased visits, with app visits up

24per cent year on year.

During the year we launched Argos Pay, a flexible

credit solution in partnership with NewDay.

We also delivered significant cost savings across

stores, depots and warehouses, supported by

investments in AI and automation to improve vehicle

routing, stock management and customer targeting.

We are streamlining and modernising our store

estate by right sizing standalone stores, improving

signage and technology in Argos stores within

Sainsbury’s, and opening new collection points,

helping to improve efficiency while maintaining

Argos’ market leading convenience for customers.

In focus

Introducing Nectar360

Pollen: a simpler, smarter

way for brands to connect

with customers

Retail media is changing the way brands connect

with shoppers, bringing together digital and

in-store experiences and reaching customers when

they are most likely to act.

In the Autumn, we launched Nectar360 Pollen

(Pollen): a game-changing retail media platform

designed to make it simpler for brands to reach

customers in more meaningful, relevant ways.

Pollen brings campaign planning, activation, and

measurement into one place. From real-time

creative optimisation to intelligent audience

building, it uses generative AI to accelerate

campaign activation and effectiveness.

Using Sainsbury’s first-party Nectar insight, it helps

brands understand what’s working and optimises

campaigns while they are live. It connects media

across stores and online, giving a transparent view

of performance and impact.

Nectar360 has delivered

agenuinely

user-experience-first

platform, seamlessly

bringing together its suite

of media capabilities with

generative AI and

sophisticated real-time

multi-touch attribution.

Having all of this in one

platform is transformative

for marketers.

Charlotte Murphy

Head of Retail Media at Unilever

and one of our first clients to test

andfeedintotheuser experience

ofNectar360Pollen

16 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Save and invest to win

As we enter the final year of our Next Level plan, we

remain on track to deliver £1 billion of cost savings,

having delivered around £680 million since February

2024 and nearly £2 billion over the past five years.

Our savings programme helped us sustain the

strength of our competitive position in a year in

which we navigated high levels of operating cost

inflation, including significantly higher National

Insurance costs and the introduction of the Extended

Producer Responsibility scheme. We continue to

invest to improve colleague safety, enhance loss

prevention measures and accelerate the use of

technology to drive efficiency, resilience and

sustainable long-term value creation.

Technology and automation investments are

improving availability, reducing waste and driving

efficiency. SmartShop is now available in the

majority of supermarkets, machine learning

forecasting is embedded across all food products

and we have launched an AI Centre of Excellence to

drive responsible, scalable and value led adoption of

AI. These tools are improving colleague productivity,

customer service and supply chain optimisation,

enabling colleagues to focus more time on

customer-facing and value-adding work.

We are taking a targeted, data-led approach to

strengthening colleague and customer safety and

improving loss prevention. Trials of facial recognition

technology with Facewatch in two stores showed an

almost 50 per cent reduction in logged incidents and

more than 90 per cent of identified offenders not

returning, with the technology extended to additional

London stores and plans to introduce the technology

in more stores nationwide. We continue to additionally

invest in targeted shrink measures, including

self-checkout video analytics and enhanced

shelf-edge protection in convenience stores.

In April 2026, we announced a new partnership with

NatWest to provide loans, savings products and a

new NatWest Nectar credit card, with products

expected to be available in the second half of 2026.

We expect to complete the final stage of the bank

exit and surrender the banking licence by July 2026.

Net proceeds from the bank exit enabled the

returnof £300 million to shareholders, with a further

£100 million to be returned through incremental

share buybacks in 2026/27.

The operating profit outcome was breakeven,

representing a £22 million improvement versus the

prior year, supported by cost reduction measures

and effective treasury management.

Delivering on our outcomes continued

We are also simplifying the business to deliver

sustainable cost savings. Changes to in store

operations have reallocated 170,000 square feet of

space to improved food ranges, delivering nearly

£50million of savings. We are continuing to automate

our logistics operations, including at Argos’ Daventry

warehouse, and have introduced automated mobile

robots at our Northampton site, driving greater

efficiency and capacity and supporting long term

value creation.

Financial Services

We are creating a simpler, more focused Financial

Services model, fully integrated into our retail

business. As a result, following completion of the exit

from core banking, Financial Services will no longer

be reported as a separate operating segment. The

ongoing Financial Services contribution will be

generated from Argos Care, commission income

from Insurance, Travel Money, ATMs and white label

banking products, alongside income from the

NewDay Argos Pay partnership.

We continue to make good progress with our plan

toexit core banking services and streamline the

Financial Services proposition. In June 2024, we

announced the sale of Sainsbury’s Bank personal

loan, credit card and retail deposit portfolios to

NatWest Group, with the successful migration of

customers completed across October and

November2025.

In September 2024, we announced the sale of the

ATM business to NoteMachine, which completed

inMay 2025.

In October 2024, we announced the sale of the Argos

store card portfolio to NewDay and the launch of a

new partnership to create an Argos-branded digital

credit proposition. Argos Pay went live in February

2026, with the migration of existing customers

expected to complete during 2026/27.

In July 2025, we agreed an arrangement with

AllianzUK for car and home insurance, which

completed in August 2025 and agreed the sale of

theTravel Money business to Fexco Group, which

completed in January 2026.

a) Value Reality, February 2026 vs February 2025; Acuity,

internal modelling

b) Worldpanel by Numerator Panel (Kantar), Universe: City read

Grocery, Volume market share, 2016/17 to 2025/26, 52 weeks

to 1 March 2026

c) Worldpanel by Numerator Panel (Kantar), Total FMCG exc.

Kiosk & Tobacco, Volume growth YoY, Total Market and

Sainsbury’s, 2025/26 quarters

d) Worldpanel by Numerator Panel (Kantar), Total Fresh &

Grocery exc. Kiosk & Tobacco, Main Shop Buyers, 52 weeks to

1 March 2026

e) Worldpanel by Numerator Panel (Kantar), Total Fresh &

Grocery exc. Kiosk & Tobacco, Primary shopper number

growth (actual) 2020/21 to 2025/26, 52 weeks to 22 February

2026. Primary shopper is defined as any shopper who

bought 40% or more of their groceries at particular retailer

within the time period indicated

f) Worldpanel by Numerator Panel (Kantar), Total Fresh &

Grocery exc. Kiosk & Tobacco, Retailer to/from Volume net

switching gains/losses, 52 weeks to 22 February 2026

g) NielsenIQ EPOS, Total FMCG excl. Kiosk & Tobacco, Fresh

categories (Sainsburys defined category hierarchy) volume

growth YoY, 52 weeks to 28 February 2026

h) Worldpanel by Numerator Panel (Kantar), Total Fresh & Grocery

exc. Kiosk & Tobacco, Premium Own Label tier (excl. Premium

Plus tier), Volume growth YoY, 52 weeks to 1 March 2026

i) Worldpanel by Numerator Panel (Kantar), Total Fresh &

Grocery exc.Kiosk, Premium Own Label tier (excl. Premium

Plus tier), Basket size – number of Taste the Difference items

per basket, Frequency and Buyers YoY growth, 52 weeks to

1st March 2026

j) Nectar / Groceries Online customers shopping both Aldi Price

Match and Taste the Difference at least once during 2025/26

k) CSAT Supermarket Competitor Benchmarking data – Overall

Supermarket Satisfaction 2025/26 vs full-choice grocers and

2025/26 vs 2024/25 year-on-year improvement in key

metrics: value for money, product range, quality and

availability. Note: March 2025 data unavailable

l) Groceries Online includes sales through Sainsburys.co.uk

and sales through OnDemand channels serviced by

supermarket and convenience locations

m) CSAT Convenience Competitor Benchmarking data –2025/26 vs

2024/25 year-on-year improvement in key metrics: value for

money and product range. Note: March 2025 data unavailable

n) Based on Cost Of Goods Sold (COGS) from suppliers (Dairy,

Meat, Fish, Poultry, Produce) with minimum five year

long-term agreements in place or planned, divided by total

COGS of these categories

o) Brand Tracking – Style (H2 2025/26 vs H2 2024/25)

p) Worldpanel by Numerator Panel (Kantar), Total Clothing,

Footwear and Accessories. YoY retailer spend growth vs the

market – from 12 weeks to 23 June 2024 to 12 weeks to

1March 2026

q) Increase in digitally active Nectar users February 2026

vsFebruary 2025

r) Argos CSAT Survey – value for money and product range

– February 2025/26 vs February 2024/25

s) YouGov Brand Tracking – Consideration – YoY improvement,

2025/26 vs 2024/25

t) GFK (Home) & Circana (Toys) market share data, 12 months

to the end of February 2026

17 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Key performance indicators

Operational

Plan for Better commitment

Definition

Key sustainability focus areas across GHG emissions,

plastic packaging, food waste and healthy and

sustainable diets.

2025/26

2024/25

2023/24

2022/23

2021/22

2025/26

2024/25*

2023/24*

2022/23

2021/22

2025/26

2024/25

2023/24

2022/23

2021/22

Food volume growth (%)

Ahead of the market

Definition

Growth in Sainsbury’s Grocery volume market share

over 52 weeks as measured by Kantar.

+46 bps

vs 2023/24 base

Customer satisfaction

(score)

Definition

The percentage of ‘highly satisfied’ answers out of

the

total sample in response to the following question:

“Based on your most recent visit or online order to

thisSainsbury’s,

how satisfied were you with your

overall experience?”

(60) bps

vs 2023/24 base

Colleague engagement

(score)

Definition

Colleague engagement score out of 100 from the

internal, annual ‘We’re Listening’ survey in response

to the question: “How happy are you working

forSainsbury’s”.

Maintained

vs 2023/24 base

Reason

Measures our success in becoming the first choice

forfood for more customers and a key driver of

operating leverage.

Reason

Measures performance on key drivers of customer

satisfaction, helping us gauge whether we are making

the right balanced choices.

Reason

Measures colleague motivation and satisfaction,

recognising that our colleagues are crucial to our

success as we build a right-sized organisation set up

to win.

12.22

12.21

12.48

12.82

12.94

Carbon Scope 1 and 2 – ahead of SBTi 1.5 °C

trajectory to be net zero by 2035

Carbon Scope 3 – achieved 2025/26 targets

forsuppliers with any SBTi 1.5 °C

targetsapproved

Plastic – missed 2025 CY target for plastic

packaging reduction

Food waste – on track for 50% reduction by 2030

Healthy and sustainable diets – missed 2025/26

target for Healthy and Better for you sales tonnage

Reason

Measures progress against our Plan for Better to

support a resilient and sustainable food system in

the UK.

In the absence of targets aligned to Next Level

Sainsbury’s, assessment is based on progress

towards either interim or long-term targets.

* Kantar universe restated data. 2021/22 data from the previous programme; adjusted to align

with current methodology.

18 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Financial

Return on capital employed

(%)

versus 2023/24 base

Definition

Underlying profit before interest and tax, divided by

average netassets excluding pension deficit/surplus,

less net debt, calculated ona14 point basis. Target to

increase. Refer to note A4.1 on page 206

forreconciliation.

+60 bps

vs 2023/24 base

Reason

Vital to ensuring that our investments in food

space,technology and efficiency generate strong

long-term returns.

Retail free cash flow (£m)

£1.6 billion over three years

to2026/27

Definition

Net cash generated from retail operations, after

cashcapital expenditure and after investments

injoint ventures and associates. Refer to note A2.1

onpage 204 for reconciliation.

£1,105 million

cumulative cash

Reason

Measures whether we are balancing the need to

invest in the business while also delivering strong

cash returns for shareholders.

Profit leverage from sales

growth (%)

Retail underlying operating margin

versus 2023/24 base

Definition

Profit leverage measured through an improvement

inretail underlying operating margin. Calculated

asretail underlying operating profit as a percentage

of retail sales excluding fuel excluding VAT.

(6) bps

vs 2023/24 base

Reason

Measures whether our volume growth and cost

savings delivery are converting sales growth into

stronger profit delivery.

Cost savings (£m)

£1 billion over three years

to2026/27

Definition

Total cost savings as a result of identified initiatives

excluding Sainsbury’s Bank.

£680 million

cumulative savings

Reason

Recognises cost savings are a vital source of fuel to

reinvest in value, quality and service by creating a

more efficient, automated and simplified business.

2025/26

2024/25

2023/24

2022/23

2021/22

2025/26

2024/25

2023/24

2022/23

2021/22

2025/26

2024/25

2023/24

2022/23

2021/22

2025/26

2024/25

2023/24

2022/23

2021/22

Key performance indicators continued

553

363

347

349

331

503

645

639

531

574

8.4

7.6

8.3

9.0

8.9

19 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Our people and culture

Developing an inclusive culture

Our vision is to be the most trusted

retailer, where people love to work

andshop. That means developing and

growing our talent and maximising

the creativity and diversity of

colleagues in an environment

whereeveryone can thrive.

Our colleagues are integral to delivering our Next

Level Sainsbury’s strategy and we are committed to

creating a truly inclusive workplace where everyone

is treated fairly and with respect and supported to

grow their skills and realise their potential.

Our valued behaviours

Our valued behaviours are embedded across everything we do in order to deliver our purpose and strategy.

They enable all colleagues to understand our ways of working and what is expected of them to enhance

thecolleague and customer experience. Our valued behaviours are reflected in policies, incentive and

recognition schemes such as ‘Love It’ and decision-making to help us embed our desired culture.

Aligned with our valued behaviours, we have set performance expectations for our colleagues and defined

leadership expectations for our leaders to role model. These provide a framework for everyone to understand

how delivery in their roles translates into performance. These expectations underpin our approach to

managing and incentivising performance and supporting career and development conversations.

• Do what you say you’ll do

• Don’t walk past a problem

• Improve things for

yourcustomer

• Spot opportunities

tosimplify

• Walk in the shoes of your

colleagues and customers

• Show care and respect

toeveryone

Own It

Human

Make It

Better

Investing in colleagues

Our colleagues are the beating heart of our business and

we believe that happy, healthy and engaged colleagues

deliver great customer service. To support our frontline

customer-facing colleagues, we rewarded their

exceptional contribution with an above inflation pay rise

earlier this year. We have increased pay by 42 per cent

in the last five years, reflecting our commitment

tosupport colleagues’ wellbeing and success with

competitive rates and a strong benefits package.

We offer a competitive pension scheme contributing

up to 7.5 per cent of salary and colleagues also benefit

from support on their everyday spending through

our uncapped colleague discount. We offer 10 per

cent discount at Sainsbury’s and Argos all year

round, with discount increasing to 15 per cent at

Sainsbury’s every Friday and Saturday, alongside

additional discount uplifts at key moments such as

Easter and Christmas. This year we celebrated our

Christmas peak period by giving colleagues a

£10voucher towards their festive shopping.

We continue to provide practical, day-to-day support

for colleagues across our operations, including free

food for store and depot colleagues during their

shifts and free sanitary products for colleagues

across all our locations.

All colleagues have the opportunity to become

shareholders in Sainsbury’s through our Sharesave

and Share Purchase Plan. To further support financial

resilience, we partner with Salary Finance, giving

colleagues greater flexibility to access a proportion

of their pay ahead of pay day. Colleagues also have

access to Simple Savings and Help to Save saving

schemes where they can save directly from salary.

In addition, we continue to make an annual

contribution to GroceryAid, a charity that supports

grocery workers across a range of areas, including

financial support.

20 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

leaders and ethnic minority future leaders. During

the last financial year, ten colleagues from different

levels of the organisation participated in these

programmes, supporting our commitment to

building a leadership team that reflects the

communities we serve.

Health, safety and wellbeing

Alongside our focus on development and growth,

weare equally committed to ensuring that colleagues

are safe, supported and able to perform at their best.

The health, safety and wellbeing of our colleagues and

customers is a fundamental priority and is central

toour Safer and Healthier Sainsbury’s strategy.

Thisstrategy strengthens our proactive approach

tomanaging risk and ensures clear oversight of our

key controls, which are now monitored and assured

through our Group Safety Committee.

We continue to respond to rising retail crime through

a combination of preventative measures, including

strengthening local communication, enhancing

colleague training and development and trialling

new solutions. In September 2025, we trialled facial

recognition technology with Facewatch in two of our

stores to help keep our colleagues and customers

safe. The results were encouraging, with a 46 per

cent reduction in logged incidents of theft, harm

andaggression and anti-social behaviour and

92percent of offenders did not return to our stores.

Due to the success of the trial, in January 2026, we

extended thetechnology to five additional London

supermarkets and as the rollout to more stores

progresses, we will continue to learn from it and

refine our approach as we go.

Our independent Health and Safety team

providesspecialist support across all areas of the

organisation, using risk mapping and data insight

toidentify sites needing targeted intervention,

maintain strong compliance and reduce harm.

Thisyear, we achieved a 13 per cent reduction in

accidents and incidents and a 31 per cent reduction

in major recoverable incidents, driven by a number

oftargeted interventions introduced by the Health

and Safety team. This performance significantly

exceeded our targets.

Ensuring our

colleagues stay

healthy, safe and

well is fundamental

to our people centred

approach to business.

Tracey Clements

Chief Retail, Logistics and Supply Chain Officer

andOperating Board Sponsor for Wellbeing

As part of the Safer and Healthier Sainsbury’s

strategy, we are broadening our focus on colleague

health through proactive measurement and

management of psychosocial risk, musculoskeletal

health and occupational disease. This work builds on

regulatory expectations and emerging best practice,

strengthening our preventative approach and

long-term health outcomes.

We maintain strong governance processes, with

regular Board and union engagement, supported by

a well-established Primary Authority partnership

across health, food, fire and petroleum safety. These

relationships ensure continued regulatory alignment

and confidence.

Supporting the wellbeing of our colleagues is equally

important to us. Our holistic wellbeing approach

isembedded into every aspect of our employees’

experience and is underpinned by our three pillars:

mental, physical and financial wellbeing. We have

adedicated Wellbeing team which is responsible for

developing and driving our wellbeing strategy, which

is overseen by our Wellbeing Steering Committee

and Tracey Clements, Operating Board Sponsor for

Wellbeing. Our network of colleague Wellbeing

Champions plays a vital role in promoting awareness

of available help and support and ensuring colleague

voices are heard across the organisation.

We aim to ensure that every colleague will have

access to mental, physical and financial health

andwellbeing support that enables them to make

positive and proactive choices, to thrive in all aspects

of life. We offer a range of wellbeing programmes,

initiatives and education, such as our partnerships

with the Employee Assistance Programme, Salary

Finance, Wellhub and Wellbeing pages on our intranet.

Our Mental Health Policy affirms our commitment

toproviding a working environment which supports

and respects colleagues experiencing mental health

problems, including access to line manager support,

workplace adjustments, occupational health and the

Employee Assistance Programme where required.

97per cent of line managers completed our Mental

Health Awareness training, strengthening their

capability to support our colleagues’ mental wellbeing.

Our people and culture continued

Opportunities to develop and grow

We offer a wide variety of development programmes

and opportunities for colleagues at every stage of their

career. These include personal development toolkits,

apprenticeships, graduate programmes and leadership

programmes including Leading@Sainsbury’s. Colleagues

also have access to a comprehensive learning platform

which hosts mandatory training, online courses and

range of personal development courses.

Over the last year, we have upskilled retail colleagues

across a series of core skills to better serve our

customers, enabled by simplified learning that

prioritises on the job learning. Within six months,

thepercentage of colleagues with all four core skills

had increased from 6 per cent to 39 per cent, unlocking

flexibility and capability across the shop floor. Through

this multiskilling initiative, colleagues have more

earning potential, with the number of colleagues

regularly completing overtime up 25 per cent. We have

developed 605 colleagues into first line manager

roles via our Retail Trainee Manager Programme,

strengthening our internal talent pipeline and

supporting progression from within. For our existing

managers, we ran a Retail Leadership Capability

Programme, with over 11,000 retail managers

completing upskilling in Leading Change, Inclusive

Leadership and Planning andPrioritisation.

We have also significantly strengthened our

corporate capability to deliver human centred change

at scale. Through our Leading Change upskilling

programmes, more than 1,000 leaders across retail

and our store support centres built the confidence

and capability to anticipate and address resistance to

change, accelerate adoption, improve consistency of

outcomes and enhance the experience of change for

our colleagues. Alongside this, we evolved the role of

our Make It Better Together representatives, enabling

over 80 Change Champions to actively role model

change and support their functions as early adopters.

Together, these investments have materially

improved our ability to land change with greater

pace, empathy and impact across the organisation.

In January 2026, we opened applications for a new

graduate programme, FutureMaker, designed to

support early career professionals in developing

theessential skills all future retail leaders will need.

Thetwo-year programme provides experience at the

heart of Sainsbury’s, developing critical skills in four

key areas identified as the skills shaping the future

of retail: digital and AI; data and analytics; change

and transformation; and business decision-making.

Our leadership offer provides the opportunity to

participate in a range of development programmes,

including coaching designed to support colleagues

to build both functional and leadership skills and

capabilities. To strengthen a diverse leadership and

talent pipeline, we provide opportunities for our

diverse talent to participate in programmes

delivered by Diversity in Retail for women future

21 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Our people and culture continued

Sainsbury’s Colleague Networks

Our networks are led by our colleagues and are open to colleagues of that community and other allies. 13,000 of our colleagues are members of the networks.

at Sainsbury’s

Our EnAble network champions all colleagues with disabilities, long-term conditions and neurodiverse conditions and supports them all

tofulfil their potential by building an inclusive environment for them to thrive and feel empowered. It is sponsored by Bláthnaid Bergin,

Chief Financial Officer.

This year, the EnAble network hosted a Disability Week which focused on how line managers can support colleagues with disabilities

andlong-term chronic conditions, including those with neurodiverse conditions, and focused on celebrating the successes of those living

with disabilities.

Our I AM ME network is dedicated to fostering confidence, driving authenticity and supporting better career progression of ethnically

diverse colleagues, celebrating different cultures and building an inclusive environment. It is sponsored by Graham Biggart, Managing

Director Argos and Chief Strategy Officer.

In the year, the I AM ME network hosted many business-wide events, including Race Equality Week, South Asian Heritage Month, East

andSouth East Asian Heritage Month and Black History Month. A particular highlight was an event called Courage as a Collective in Race

Equality Week which focused on how everyone can take responsibility for ensuring racial equality in the workplace.

Our Inspire network drives positive change within Sainsbury’s, creating an inclusive culture that inspires, connects and supports

colleagues to reach their potential, regardless of gender. It is sponsored by Rhian Bartlett, Chief Commercial Officer.

This year, as well as a four-week-long celebration of International Women’s Day which highlighted the inspirational career stories of

leading women at Sainsbury’s and in the grocery industry, the network was instrumental in the implementation of the Little Book of

Women’s Health and the Women’s Health Series.

Our Proud@Sainsbury’s network aims to support our ambition to be a truly inclusive retailer where every one of our colleagues can fulfil

their potential and where our customers feel welcome when they shop with us. It is sponsored by Mark Given, Chief Technology, Marketing

and Data Officer.

This year, the Proud@Sainsbury’s team and allies were a visible presence at more than 30 Pride events across the country, including

UKBlack Pride, emphasising the importance of allyship and cross-organisational working. They also continued to mark many important

moments, including Trans Awareness Week, International Day Against Homophobia, Transphobia and Biphobia, Non-Binary People’s Day,

Bisexual Awareness Week, Lesbian Visibility Day, Non-Binary Awareness Week and LGBT+ History Month.

We Care at Sainsbury’s

Our We Care network aims to make caring visible by raising awareness and supporting our carer colleagues to reach their full potential by

building empathy and real flexibility to drive positive culture change. It is sponsored by Claire Pickthall, Retail, Omnichannel and Logistics

Transformation Director.

During the year, the We Care network focused on providing resources, guidance and advice for our carers and line managers. It also

celebrated Carers Week, during which it was instrumental in the launch of the Carer’s Passport, including a video and a guide which help

managers and colleagues to use the Carer’s Passport well.

Health, safety and wellbeing

continued

We have also empowered our colleagues to work

differently in ways that support both performance

and wellbeing. The launch of our Next Level Ways

ofWorking initiative marked a significant step

forwardin how we operate across our store support

centre. The initiative has four clear pillars: Customer

Closeness, Outcome-Based Working, Smart Weeks,

and Meaningful Meetings – designed to maximise

performance, productivity and flexibility.

Smart Weeks provide colleagues with greater

flexibility in how they structure their working time,

recognising that workload and personal commitments

vary across the year, while continuing to meet

theneeds of a seven-days-a-week business. By

embedding these principles, we have empowered

every store support centre colleague to work more

flexibly, connect more closely with customers across

our 40 store hubs and three store support centres, and

ensure our meetings are purposeful and productive.

This approach supports a thriving workplace culture

while strengthening our ability to deliver for customers

and frontline colleagues.

Colleagues who told us they feel

comfortable being themselves at work

79%

(We’re Listening, August 2025)

Rated

Tier 1

in the 2025 CCLA Mental Health benchmark – the

first and only food retailer to achieve this ranking

two years in a row

22 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Total colleagues

Women (68,707) 49.4%

Men (70,380) 50.6%

2028 target: 50% women 2028 target: 15% ethnically diverse

Diversity and inclusion targets

Senior leadership positions (the top 180 leaders)

2025/26 2025/26

43.2% 7.7%

2024/25 2024/25

48.4% 8.9%

1 Excluding Bank and Asia colleagues.

2028 target: 50% women 2028 target: 15% ethnically diverse

Senior management positions (the top 1,000 leaders beneath the top 200 senior

leadership positions)

2025/26 2025/26

41.4% 12.5%

2024/25 2024/25

41.4% 11.7%

2 Excluding Bank and Asia colleagues.

Building a diverse

workforce is our best way

of representing and serving

our communities across the UK.

We’recommitted to ensuring that we

represent our customers today and

meet the needs of our customers

tomorrow in the most relevant

andengaging ways.

Graham Biggart

Managing Director Argos and Chief Strategy Officer

Diversity, equity and inclusion

Our diversity, equity and inclusion (DEI) strategy,

aligned to Sainsbury’s purpose, is focused on embedding

inclusion and equity into how we work and creating an

environment that reflects the communities we serve. We

build inclusive practice into our talent and performance

processes from the point a colleague joins us, including

new Inclusion training at onboarding, which encourages

everyone to be comfortable being themselves at work

and emphasises the importance of supporting one

another. We’ve identified a number of moments that

matter across the colleague lifecycle where we’re

ensuring that managers know the importance of

inclusion and equity when evaluating performance.

We listen closely to colleague feedback through our

annual engagement survey, regular pulse surveys

and ongoing listening, using these insights to drive

action at team level and continuously improve the

colleague experience.

We continue to concentrate on equal representation

and transparency across the business, and this year

marks our ninth gender pay gap report and the sixth

year of voluntarily reporting on our ethnically diverse

pay gap. In our most recent report, our mean gender

pay gap decreased further from 7.5 per cent to 6.6 per

cent in favour of men, while our median gender pay

gap has increased from 6.1 per cent to 6.5 per cent. This

pay gap continues to exist due to more senior positions

held by men, and men occupying a greater number

of certain hourly paid roles that attract a premium.

Our mean ethnicity pay gap has decreased by

0.1percent to -3.3 per cent, and the median ethnicity

pay gap has grown by 0.2 per cent to -6.0 per cent,

meaning the gap favours our ethnically diverse

colleagues. Although all retail hourly paid colleagues

receive the same base rate of pay, stores in London

attract a location premium which drives this outcome.

Ethnically diverse retail hourly paid colleagues are

significantly more likely to work in London stores,

with around 48 per cent based there compared to

only 7 per cent of White hourly paid colleagues.

As we continue to navigate organisational change, our

focus remains on improving diverse representation at

all levels of the business. We have a stretching ambition

to achieve 50 per cent women and 15 per cent ethnically

diverse representation at senior levels by 2028. These

targets, covering the period from 2024 to 2028, were

informed by a detailed analysis of our workforce

demographics alongside national benchmarks,

ensuring they are both ambitious and relevant to

ourbusiness context. Progress against these targets

is setout on on the graphs on the left of this page.

Each division receives a quarterly update of progress

against these targets, allowing our People partners

to work closely with their business leaders in order

toensure that they keep a focus on building a talent

pipeline that supports our inclusive ambitions.

We are committed to being an inclusive employer

with diverse representation at all levels of our

business. Senior managers involved in recruitment

are trained to make inclusive decisions and actively

manage bias throughout the process. Our recruitment

dashboard enables us to assess how effectively we

attract diverse talent across our store support centre,

retail and logistics roles, and to identify any adverse

impact within the recruitment process. Using these

insights, we work closely with our Talent partners

across the business to agree and implement targeted

interventions that support our inclusivity objectives.

We are proud that our diversity, equity and inclusion

initiatives have been recognised at a national level,

being recognised as a ‘Leading Edge’ employer in the

Women in Hospitality & Leisure/Diversity in Retail

Inclusion Maturity Curve and scoring 7.2 against an

industry average of 4.8 in the Diversity in Grocery

Maturity Model.

Further information can be found in the Better for

everyone section of our corporate website and

inourGender and Ethnicity Pay Report at

https://corporate.sainsburys.co.uk/

Our people and culture continued

23 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Engaging with our stakeholders

Why they matter

Customers trust us to deliver good food and they rely

on our winning combination of great value, outstanding

quality, excellent availability and leading service.

Their insight shapes a great value, high quality and

innovative food-led offer that delivers for more

households and is central to our ambition to be first

choice for food. Engaging with our customers is

fundamental to everything we do and crucial to our

purpose as a business. By listening to what matters

most and responding with care, we’re able to create

more personalised, meaningful experiences, build

trust and strengthen loyalty. By responding to our

customer needs we ensure our products and services

continue to meet evolving desires and needs, both

today and in the future.

What matters to them

• Value

• Availability

• Service

• Product quality and range

• Convenience and location

• More range in more locations

• Channel mix including On Demand

• Speed of Groceries Online delivery

• Responsible sourcing and sustainability

• Commitment to ethical business practices

• Minimising food waste

How we engaged

We engaged with our customers through a range

ofchannels, helping us to improve our products and

services. Through our customer satisfaction surveys,

we collected customer feedback across Sainsbury’s,

Tu and Argos. To provide a view of changing behaviours,

loyalty drivers and sentiment we used Nectar data,

customer analytics and brand tracking, along

withfocus groups and product panels to test new

initiatives. Social media monitoring highlighted

emerging needs and concerns in real time to

enableus to respond to customer needs quickly.

The Board’s decisions are guided by our purpose,

culture and values, with a clear focus on the

long-term success of the Group. In making decisions,

the Board considers the benefits and risks involved,

the financial implications for the business, and the

impact on those who are connected to Sainsbury’s.

The Board believes that understanding our stakeholders,

and what matters most to them, is fundamental

todelivering sustainable performance over

thelongterm.

The Group’s key stakeholder groups are identified

below, with details of the engagement that the Group

has undertaken during the year. Further information

on how the Directors have had regard to stakeholder

interests and examples of how feedback from this

engagement has informed decision-making and

actions taken by the Board when carrying out their

duties are set out in the section 172 statement in the

Governance report on page 64 of this Annual Report.

Engagement outcomes

Customer insight guided improvements across value,

quality and the shopping experience. We strengthened

our value offer through Nectar Prices and focused

price investment, refreshed and expanded our fresh

food and own brand ranges and improved availability

through the year, including our best ever Christmas

availability. Customer insights led to the development

of more than 1,200 new Own Brand products during

the year, of which around 50 per cent were Taste the

Difference. Our store refit programme created additional

space which enabled us to bring a greater product

range to customers. As well as the expansion of our

Taste the Difference Discovery range, we rolled out

our Discovery Meal Deals to meet customer demand

for modern Indian and comfort food and, in response

to growing consumer demand, we introduced a new

range of high protein and nutrient-rich meals. We

strengthened our value proposition across the year

with the biggest Aldi Price Match in the market, more

than 10,000 Nectar Price offers every week, personalised

Your Nectar Prices and Nectar points offers.

We enhanced digital journeys across Sainsbury’s

andArgos, helping more customers shop with us

inthe way that suits them best. We have 24 million

active Nectar users and this year we have seen Nectar

digital engagement reaching record highs as more

customers access both weekly bonus points and

personalised pricing through the Nectar app. This

year, over two thirds of UK retail shoppers shopped

with Sainsbury’s with more customers choosing

Sainsbury’s for their big trolley shops. We’re also

attracting a younger demographic as well as more

families. In Argos, we added 13,000 new supplier

direct fulfilled products to our range and now have

19.6 million active Argos customers.

Customers

Section 172 statement

The Directors have had regard to their duties

under section 172 of the Companies Act 2006

throughout the year. The Board considers the

long-term consequences of its decisions and

theinterests of the Group’s key stakeholders,

inpromoting the long-term success of the

Company. The Board reviews stakeholder

engagement mechanisms regularly and ensures

that stakeholder perspectives are understood

andtaken into account in Board discussions

anddecision-making.

Further details of stakeholder engagement,

sustainability matters, risk management and

theBoard’s governance and decision-making

framework are set out on pages 30 to 33, 40 to 47,

59 to 65 and 71 to 72 of this Annual Report

J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Trialling facial recognition technology

The safety and wellbeing of our colleagues, and

thosewho work and shop with us, is paramount.

When colleagues tell us they’re worried about their

physical safety, we have a responsibility to act. A safe

environment for colleagues helps ensure customers

feel safe too – no one should feel at risk simply going

about their day. In September, we began trialling

facial recognition technology in two of our stores.

Early results showed a reduction in logged incidents

of almost 50 per cent, with over 90 per cent of

identified offenders not returning. In January we

extended the technology to five further London

stores. This expansion is intentional and transparent.

It helps us understand how facial recognition works

when several stores in the same area adopt it at the

same time, while giving colleagues and customers

confidence in how it’s being introduced.

Read more online at We must put safety first

inour stores | J Sainsbury plc

Moving to 33 Charterhouse

In 2025, we moved our head office to 33 Charterhouse

Street, a space designed to support inclusive ways of

working, collaboration and sustainability. Colleagues

were engaged early to support a smooth transition

and embed our ways of working, with strong senior

leadership sponsorship throughout. Colleague

feedback helped ensure the office works for a

diverse workforce and enables different working

styles and needs. Features include quiet areas such

as a library space, accessible toilets across multiple

floors, a dedicated contemplation room for prayer

and reflection, standing desks on every floor and

‘toilets for all’. Feedback was acted on through a

clear ‘you said, we did’ approach, contributing to

increased attendance, reduced booking no-shows

and positive colleague feedback

Why they matter

Our colleagues include everyone who is employed

bythe business. They bring our purpose to life and

play a vital role in delivering great food, service and

availability every day. Their insight and commitment

shape how we invest in our business and help us

build on our strong momentum.

What matters to them

• Pay and financial wellbeing

• Training, development and career progression

• Effective communication

• Health, safety and wellbeing

• Inclusion, respect and belonging

• Sustainability

How we engaged

We engaged colleagues through Operating

Boardlistening sessions, internal social platforms,

large-scale surveys and targeted sentiment checks.

Colleague feedback was consolidated and presented

regularly to the Board, alongside updates on culture,

talent, succession, safety and diversity, equity and

inclusion. Our national Make It Better Together

colleague contribution panels provided Board-level

insight into frontline experiences, ensuring the voice

of the workforce was embedded in decision-making.

Engagement outcomes

Colleague feedback supported decisions to increase

pay and enhance wellbeing support, including financial

guidance and education on share plans. We also

expanded our development programmes across

apprenticeship and graduate routes, including the

launch of our FutureMaker graduate programmes

designed to support early career professionals in

developing the essential skills all future retail leaders

will need (see pages 20 to 23 for details). We celebrated

our Christmas peak period by giving colleagues

a£10voucher towards their festive shopping and

anuplifted colleague discount of 20 per cent for

sixdays over the festive period.

Colleagues

Engaging with our stakeholders continued

Engagement in action

Engagement in action Engagement in action

Supporting Bank

customers and colleagues

through transformation

As Sainsbury’s Bank progressed its phased

withdrawal from core banking, early and

transparent engagement with stakeholders

wasessential. From the outset, the Bank was

clear about what the changes would mean

andwhen they would happen, recognising

theimpacton customers, colleagues,

suppliersandregulators.

A Customer Experience Plan developed with

NatWest, and overseen by the Bank Board,

ensured customers were supported through

thechange and that they experienced good

outcomes, including those with vulnerable

characteristics. A dedicated helpline was set

upand customer feedback and complaints were

monitored closely, ensuring good customer

outcomes throughout the transition.

The Bank Board recognised that this period

oftransformation would be a difficult time

forcolleagues and a potential attrition risk.

Colleagues were supported through regular

leadership communications, enhanced

wellbeinginitiatives and access to learning,

development and outplacement support.

Between March 2024 and February 2026,

Bankcolleague engagement increased by

eightpoints.

Suppliers were kept informed throughout,

withhonest open conversations helping to

manage risk and maintain service continuity.

This collective, proactive approach supported

anorderly transition and helped protect

customers, colleagues and suppliers during

aperiod of significant change.

25 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Why they matter

Access to capital is vital to the long-term performance

of our business. We have over 89,000 shareholders,

including large institutional investors and smaller

individual shareholders. We provide fair, balanced

and understandable information to shareholders

andequity analysts and work to ensure they have

astrong understanding of our purpose, strategy,

performance and culture. Regularly engaging with

shareholders helps us incorporate investors’ views

and considerations within strategic decision-making.

What matters to them

• Clear strategy and sustained delivery

• Competitive performance and grocery volume

market share

• Industry growth outlook, including inflation,

costpressures and consumer spending trends

• Changes in competitive behaviour and

industrydynamics

• Argos trading performance and outlook

indiscretionary and online general

merchandisemarkets

• Cost savings to offset operating cost inflation

• Growth opportunities from Nectar and retail

media, including Nectar360

• Disciplined capital investment delivering

improved returns

• Cash flow delivery and capital allocation,

includingdividends and share buybacks

• Progress against our Plan for Better

sustainabilitycommitments

Shareholders

How we engaged

Throughout 2025/26, we engaged investors in

roadshow activity in London, Paris, the United States,

Canada, Dubai, Abu Dhabi, Singapore and Australia

and maintained open and transparent communication

with shareholders through one-to-one and small

group meetings with our Chair, Chief Executive, Chief

Financial Officer and Director of Investor Relations.

Individual investors and shareholder groups also

engaged with our Operating Board or other subject

matter experts across the business, particularly onkey

sustainability topics, retail media and technology

investments. We also hosted a number of investors

at store visits to supermarkets which have recently

undergone investment as part of our More for

Morestrategy.

We communicate regularly with investors through

formal reporting channels, such as our results

presentations, analyst Q&A calls and our corporate

website as well as engaging with shareholders through

our Annual General Meeting (AGM), retail

shareholder presentations and attendance at key

investor conferences. We continue to benefit from

real-time feedback from investors after meetings and

the Board strategy sessions were supported by

shareholder sessions that provided insight on

themarket’s perspective and opinion of our

investmentcase.

Engagement outcomes

Our shares re-rated significantly throughout

thecourse of the year. Against the backdrop of

amore competitive grocery market and unusually

high operating cost inflation, this reflected growing

confidence in our ability to maintain the strength

ofour competitive position and continue to deliver

grocery volume market share gains without

significant margin erosion. This re-rating came

despite a significant placing of shares by the QIA in

December 2025 and reflected a healthy appetite for

our shares from both existing and new investors.

Engaging with our stakeholders continued

Engagement in action

Engaging with shareholders at our AGM

Insight

Shareholders value meaningful access to the Board

and Operating Board members, clear opportunities

to ask questions, and a better understanding of

how the business creates long-term value and

contributes to local communities. Feedback also

highlighted the importance of making engagement

accessible to all shareholders, regardless of location.

Board consideration

The Board considered how the AGM could be used

not only to meet statutory requirements, but also

to strengthen dialogue with shareholders, improve

inclusivity and provide deeper insight into the

Group’s strategy, heritage and impact.

Decision

For the 2025 AGM, the Board enhanced the format

and supporting content by:

• making Board and Operating Board members

available to engage with shareholders informally

and answer questions

• showcasing an interactive impact tool to help

shareholders understand Sainsbury’s contribution

to their local communities

• using the Sainsbury’s Archive and a dedicated

gallery to showcase the Group’s heritage and

continued focus on quality, value and innovation

• holding the AGM in a hybrid format to maximise

accessibility and participation

• encouraging questions and discussion through

alive Q&A during the meeting

Outcome

The enhanced AGM format supported open and

constructive dialogue with shareholders, improved

accessibility and participation, and strengthened

understanding of the Group’s long-term approach

to value creation.

A strong, well-run

Sainsbury’s will

deliver long-term value

creation and strong,

reliable returns for

shareholders.

Martin Scicluna

Chair

26 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Why they matter

Our partnerships with suppliers and farmers underpin

our ability to deliver quality, value and availability for

customers. We can only build resilience in our supply

chain and deliver on our strategic outcomes by working

in partnership with our suppliers. Long-term partnerships

and close collaboration enable us to invest, innovate

and build resilience together across our food system.

Through our supplier relationships we’re able to develop

solutions to the food supply challenges that we face

from climate change and geopolitical instability to

rising costs and widening health inequalities.

What matters to them

• Long-term partnerships

• Clear expectations

• Consistent communication

• Fairness and transparency

• Collaborative opportunities for innovation

• Responsible sourcing

• High sustainability standards

How we engaged

This year, we implemented a comprehensive supplier

engagement programme, combining virtual updates

with targeted in-person events. Our Supplier Trade

Briefing reached over 2,000 delegates and reflected on

progress against our strategy and the important role

our suppliers have played. We engaged directly with

suppliers through visits to supplier sites by members

of our Board, Operating Board and seniormanagers

todeepen understanding of supply chain challenges.

This was complemented by category-specific and

results briefings held throughout the year. We organised

face-to-face networking sessions for smaller suppliers

and held a senior update and dinner for key partners,

alongside ongoing engagement through Fresh, Grocery

and category newsletters. Wealso engaged with

suppliers through structured feedback mechanisms,

including the annual Advantage Survey, which gathered

input from over 1,200 suppliers. The feedback was

reviewed by the Corporate Responsibility and

Sustainability Committee to inform priorities

andareas for improvement.

Suppliers

Engaging with our stakeholders continued

Engagement in action

Respecting and protecting human rights

Respecting and protecting human rights are core

toour business, and fundamental to building a fair

and resilient food system.

This year the Board considered the outcomes

oftheGroup’s latest human rights due diligence

review, which highlighted risks in several higher risk

sourcing countries and raw materials. The Corporate

Responsibility and Sustainability Committee

challenged management on these findings and

oversaw the actions being taken in response,

including strengthening supplier screening and

expanding deep-dive assessments in at-risk

supplychains.

As part of this review, we explored progress within

our Fairtrade partnership, including the Resilience

Building Initiative designed to reinforce environmental

and human rights resilience in key sourcing

communities. We also examined priorities for

supporting improvements in UK human rights

legislation, ensuring the Group remains well

positioned for future due diligence and

reportingexpectations.

Read more about our Corporate Responsibility

andSustainability Committee on pages 70 to 72

Working in long-term

partnership with farmers and

suppliers is how we’ll secure

good food for the future

andbuild a sustainable

UKfoodsystem.

Simon Roberts

Chief Executive

Engagement outcomes

Supplier insight informed discussions on our

innovation pipeline, supported progress against

oursustainability priorities and contributed to

improvedavailability for customers throughout

theyear. Our supplier engagement strengthened

collaboration across categories and reinforced

mutual trust and momentum to build on our

important supplier relationships. Our supplier

engagement events created clear, consistent

communication on a large scale, strengthened

seniorrelationships and gave suppliers greater

clarityand confidence in our strategy and priorities.

Sainsbury’s was rankednumber one bysuppliers for

use of technology and fresh food innovation in the

2025 Advantage Survey and the feedback also

highlighted improvements in the overall supplier

experience. The insight from suppliers also helped

usto inform our areas of focus, including embedding

sustainability moredeeply into category agendas,

strengthening collaboration and co-creation

withsuppliers and providing greater support

forinnovation.

27 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Engaging with our stakeholders continued

Why they matter

We want everyone to have access to good food

andwe support communities which face barriers

tothis. We believe that everyone deserves access

toaffordable and nutritious food to help them

thriveand we have a long heritage of ensuring that

everyone can access the joy that good food brings.

With one in seven families in the UK experiencing

food insecurity and 2.1 million children living in food

poverty in the UK, our long-standing partnerships

and local programmes help families and children

access nutritious food and strengthen community

resilience at a time of growing need. Nurturing

resilient communities is at the heart of our brand so

we actively support the communities that we serve.

Communities

What matters to them

• Access to affordable, nutritious food

• Support for families and children

• Tackling food poverty

• Engagement and community presence

• Support during emergencies and times of need

How we engaged

We continued to work with Comic Relief and

supported local communities through our ‘Good

foodfor all of us’ grant scheme and store-based

Community Champions. Our involvement in the

Holiday Activities and Food programme enabled

direct support for children and families at risk

offoodinsecurity. Fundraising initiatives and

redistribution partnerships further strengthened

ourcommunity impact.

Engagement outcomes

This year, we donated £8.7 million to Comic Relief to

help tackle food poverty in UK communities. Through

our partnerships, we helped redistribute 26.8 million

meals to communities in need. We supported 697 local

good causes this year through our ‘Good food for all of us’

community grant scheme, donating over £5.3million

to initiatives supporting local communities since 2021.

With Comic Relief, we helped to fund more than

120,000 additional Holiday Activities and Food holiday

club places during school holidays across the UK.

More information on our communities can

befoundon in our Plan for Better Report on

https://corporate.sainsburys.co.uk/

28 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Why they matter

Government bodies and regulators shape the

policylandscape that we operate within, from food

standards and sustainability to employment and

taxation. As a UK-based business and a major

employer of around 140,000 colleagues, we engage

transparently and responsibly with government

andregulators. Non-governmental organisations

provide challenge and partnership that support

progress on sustainability, climate transition

anddata transparency.

What matters to them

• Openness and transparency

• Compliance with regulation and ethical standards

• Action on sustainability matters

• Insight into industry issues and operational realities

• Commitment to diversity, equity and inclusion

Government, parliamentarians, regulators and non-governmental organisations

How we engaged

We participated in consultations, roundtables

andindustry-wide forums, contributing expertise

across policy areas including food systems,

circularity, sustainability regulation and business

taxation. Weengaged directly with ministers,

officials and non-governmental organisations to

enable constructive dialogue on emerging issues

andlegislative developments. We also engaged

directly with MPs and Peers through our annual

parliamentary events and presence at

politicalconferences.

Engagement outcomes

Our engagement contributed to progress in

recyclingand packaging policy, informed national

discussions on employment and health, food systems

and sustainability, and strengthened collaboration

across the industry. We continued to work transparently

with regulators, government and NGOs to support

responsible, long-term policy development. In October,

we announced our partnership with the Department

for Education’s free breakfast club programme,

donating £200 gift cards to 750 schools, to support

healthy, nutritious breakfast provision for up to

180,000 children across theUK.

Every child deserves

accessto affordable and

nutritious food to help

them thrive. That’s why we

are proud to be partnering

with the Department for

Education on its free

breakfast clubs.

Simon Roberts

Chief Executive

Engaging with our stakeholders continued

29 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Our plan for better

Good food depends on a food system that’s set up to

thrive for the future. Our Plan for Better is our

roadmap for how we’ll play our part in securing that

future and is central to our ambition to play a leading

role in creating a more sustainable UK food system.

It brings together the priority areas we’re focused on,

the targets we’ve set and the actions we’re taking to

deliver meaningful progress.

With two connected pillars – Better for the planet

and Better for everyone – Plan for Better underpins

everything we do. It guides how we support people,

protect the planet and partner with those who grow

and make our food. By embedding this approach into

the way we work, across our business and supply

chains, we’re building the long-term resilience

needed to ensure good food for generations to come.

In 2025, our Sustainability team moved into our

Commercial function, highlighting the further

integration of sustainability within our strategic and

commercial decision-making processes.

Teams from many functions around the Sainsbury’s

business support the delivery of the goals in Plan for

Better, with progress against sustainability

targets included as part of our Executive Long-term

Incentive Plan (read more on page 96).

We are pleased to have made good year-on-year

progress across many of our Plan for Better metrics.

At the same time, we know there is still work to do,

particularly in areas such as deforestation and

conversion free sourcing, supply chain emissions and

health. These remain challenging areas, shaped by

market-wide supply chain dynamics, gaps in viable

innovation and technology and the complexity of

driving long-term behavioural change.

Creating a more resilient food system for generations to

come requires collaborative action across our industry.

That means aligning on how we measure and share data,

advocating for effective, evidence-based policy change

and working collaboratively across our supply chain and

sector partners to build the innovations we need.

Address food poverty

in our communities

Healthy &

sustainable diets

Champion

human rights

Animal health

& welfare

Diversity, equity

& inclusion

Opportunities

to develop

& grow

Colleague

health &

wellbeing

Reduce Scope

1 & 2 emissions

Reduce Scope

3 emissions

Water

stewardship

Nature

positive

Reduce waste Circular

packaging

Responsible sourcing and business practices

Transparency

Robust corporate governance

Collaboration and partnership

For more information on how we are driving an

inclusive culture, please see pages 20 to 23

Plan for Better

We’re looking forward to the year ahead and driving

progress in key areas that further our ambition and

purpose. We know eating well remains a challenge, so

we will be launching our new health strategy (read

more in our Plan for Better Report). We will continue to

progress our work to tackle food poverty to help make

sure no child or family goes hungry.

As we strive towards our net zero ambitions, we aim

tocontinue to reduce carbon emission in our own

operations, as well as engage with suppliers and

collaborate with industry to help reduce our Scope 3

emissions.

We will focus on enhancing supply chain resilience

and responsible sourcing across climate, nature,

human rights and animal welfare to help build a

resilient food system. We also aim to accelerate

action to reduce food waste, continuing to

redistribute food to people and communities in need

through our charity partners and setting up

infrastructure to increase the volume of unsold

produce diverted to animal feed.

Strategic Report

30 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report

Performance dashboard

Most material issue Existing targets Progress against target this year Progress details

Healthy and

sustainable diets

At least 85% Healthy and Better for you

sales tonnage sold by 2025

82.2% of our sales are Healthy and Better for you

Up 0.4% year-on-year

Up 0.2% versus baseline

88.5% of our own brand sales are Healthy and Better

for you

Our ambition remains to help more households achieve a diet in line with the

UK’s dietary guidelines for health (the NHS’ Eatwell Guide). We have delivered

modest improvement against our challenging baseline, focusing our health

efforts on awareness, affordability, incentivisation, availability and

advocacy. We acknowledge that working to a 2021/22 baseline for our target

has been challenging. It reflects purchasing patterns during COVID-19, when

customers spent more time at home and purchased more scratch cooking

foods for home cooking. Subsequent inflationary pressures and changes to

shopping habits have further influenced progress.

Reducing carbon

emissions

Reduce Scope 1 and 2 greenhouse gas

emissions from our own operations to net

zero by 2035

441,017 tCO

e of absolute greenhouse gas (GHG)

emissions from our own operations

Down 1.7% year-on-year

Down 53.6% versus baseline

Through our Graphite investment programme, we invested £18 million in

energy efficiency this year, installing voltage optimisation, metering controls

and additional AirDoors, while over 280 of our stores across the UK are now

Reduce absolute Scope 3 greenhouse gas

emissions in line with 1.5

C trajectory

51.6% of our Scope 3 emissions are covered by

suppliers that have had any 1.5

C targets approved by

the SBTi

Measuring Scope 3 emissions remains an industry-wide challenge. To

strengthen our approach we have partnered with two strategic data

providers to support Scope 3 reporting and model significantly more specific

emission factors, at the product and ingredient level for our own brand

products and electrical products (Argos only).

Reducing

food waste

Reduce food waste by 50 per cent by 2030 0.503% of food handled sent to anaerobic digestion

Down 18.4% year-on-year

Down 30.9% versus baseline

This year we have redistributed 26.3 million meals. We also nearly doubled

the tonnage of edible surplus food being donated to local communities,

preventing 11,030 tonnes of surplus food going to waste, a 49.3 per cent

increase year-on-year.

Circular

packaging

Reduce our own brand plastic packaging

by 50 per cent by 2025, increase recycled

content and recyclability

57,305 tonnes of own brand plastic packaging

Up 2.7% relative year on year

Down 17.3% relative versus baseline

On an absolute basis, our own brand plastic packaging tonnage reduced

by 3.9 per cent year-on-year and declined by 17.9 per cent versus our

baseline.

Championing

human rights

Respect human rights across our value

chain and ensure our businesses’ transition

to net zero is just and equitable for the

communities we source from

Implementation of HRDD action plan, commercial

integration, investment in on-the-ground

programmes in high risk sourcing areas

We continue to embed human rights due diligence and processes into our

technical, commercial and procurement practices. This year we refreshed

our Human Rights Policy and Saliency Assessment and conducted in-depth

risk assessments for high risk raw materials and sourcing countries to assess

our sourcing resilience. We also delivered training to over 100 colleagues and

over 700 supplier representatives to help increase awareness of human rights

risks and strengthen due diligence.

For more information on our sustainability goals

andperformance this year, see our

Plan for Better Report

See our corporate website for more information

Plan for Better continued

31 J Sainsbury plc Annual Report and Financial Statements 2026 Financial StatementsStrategic Report Governance Report