Interim Results Announcement 2026-27

2026/27 Outlook

The consistent strength of our customer offer helped deliver volume growth, share gains and profit growth in the first half. Looking to the second half, we expect the market to remain very competitive and we will make deliberate, balanced choices to sustain the strength of our offer, investing in value, quality, availability and service.

Reflecting this alongside our first half performance and the classification of Argos as a discontinued operation, we have adjusted our profit guidance. Our previous guidance of £975 million to £1,075 million would be equivalent to £965 million to £1,065 million on a continuing operations basis, removing Argos’s contribution.

We are now raising the lower end of this range and expect underlying operating profit from continuing operations of between £1,025 million and £1,065 million. We continue to expect to deliver free cash flow of more than £500 million.

Strategic Highlights

As part of the Next Level Sainsbury's plan that we set out in February 2024, we made eight commitments.

In the final year of this plan, we continue to make good progress against these commitments. We have consistently sustained a strong competitive position, investing in all aspects of the customer offer and we have made market share gains despite tough comparatives. Investment in our colleagues, technology, infrastructure and long-term supplier relationships has built a more resilient and sustainable business. This investment in the long-term strength of our business has been balanced with stronger financial delivery. We have consistently generated strong free cash flow and we have enhanced cash returns to shareholders while our cost savings programme has helped support profit growth and improved return on capital.

Our progress against the commitments has been driven by the four strategic outcomes we established as part of the Next Level Sainsbury's strategy: First choice for food, Loyalty everyone loves, More Argos, more often and Save and invest to win. In July we announced the planned sale of Argos to Swift Partners. The separation allows both businesses to pursue their own distinct strategies, creating a simpler, more focused Sainsbury's and enabling Argos to continue its transformation under new ownership.

First choice for food

Over the last six years, we have re-established the unique strength of the Sainsbury’s food offer, improving and consistently delivering a winning combination of value, quality and service. More and more customers are choosing Sainsbury’s as a result and we have grown our share of big basket primary customers⁷ and made significant market share gains⁸.

We made further progress in the first half, generating volume growth⁹ and further growing our share of main shop customers¹⁰. We will continue to focus on the delivery of sustainable sales and profit growth while building on Sainsbury’s strong food heritage and supplier relationships to deliver outstanding food innovation, choice and quality.

Volume growth and market outperformance

• Continued market share gains¹¹ and volume growth⁹

• Further increase in market share of main shop customers¹⁰

Delivering consistent value

• Strengthened value position against key competitors¹², inflating behind the market¹³

• Unique value combination - biggest Aldi Price Match in the market¹⁴, Nectar Prices on almost 11,000 products, additional personalised value through Your Nectar Prices - continues to resonate with customers

• Customer satisfaction scores in value for money and appealing promotions ahead of all other full choice grocers¹⁵

Driving food innovation, quality and healthy choices

• Investing in fresh food, delivering sales growth of 4.3 per cent and completing biggest-ever changes to fresh food offer - range and space allocation changes across all supermarkets to provide greater choice, convenience and product discovery

• Accelerating the pace of innovation, with more than 2,000 new and improved products expected this year, our biggest innovation programme ever

  • Taste the Difference sales up more than six per cent, continuing to grow faster than the market¹⁶. Discovery range of restaurant-quality meals has doubled this year, driving one quarter of Taste the Difference growth and extending into new categories including BBQ and Italian meals. Expected to exceed 200 products by year end

  • Supported healthier choices through innovation and product reformulation. More than 750 products now included in our Full on Fibre range

Strengthening our estate and operational resilience

• Store investment programme delivering positive customer and financial outcomes, with customer satisfaction¹⁷ and sales growth in invested stores performing ahead of the rest of the estate

• Invested in more than 170 stores during the half

• Added an average of 1,500 new products per store in key space reallocation investments

• Investment in refrigeration, stores and technology supported strong availability and operational resilience during periods of extreme heat; fresh food availability nearly two percentage points ahead of key competitors during most challenged heatwave weeks¹⁸

• Opened two new supermarkets and 14 convenience stores in the first half and expect to open around ten new supermarkets and around 25 convenience stores in total during the year. Strong like-for-like growth in stores opened last year and encouraging early performance from new stores

Delivering for customers however they want to shop with us

• Overall supermarket customer satisfaction continued to improve, maintaining lead against key competitors¹⁹

• Focus on improving in-store shopping experience driving increase in supermarket customer satisfaction metrics for ease of finding products and ease of moving around the store²⁰

• Enhanced Sainsbury’s app now consolidates Groceries Online, SmartShop and OnDemand and includes new innovations including “Search your store” product finder and AI-driven “SmartLists”

• Groceries Online²¹ sales up 9.0 per cent. OnDemand extended to nearly 95 per cent of stores. Sales up 27 per cent

• Convenience²² sales up 0.8 per cent in a challenging market. Strong performance of new stores offsetting impact of disruption during extreme heat

• Continued investment in colleagues, with pay increase for hourly-paid colleagues of five per cent. Launched KickStarter, our new Modern Work Experience Programme to make work experience fairer and more accessible to everyone, creating around 10,000 training opportunities for young people to help build skills. Welcomed the first cohort of FutureMaker, our new flagship graduate programme

• Expansion of Sainsbury's Money with launches in partnership with NatWest of personal loans in September and savings in October, rewarding Nectar customers with additional value. Credit cards to follow later this year

Supporting farmers and growers to build a more resilient food system

• Long-term partnerships with farmers and suppliers helping deliver quality food at great value, while ensuring fair returns, supporting profitability and investment for the future. Helping build a more resilient food system and maintain quality and availability for customers despite increasingly challenging growing conditions

  • By the end of 2026, 60 per cent of products in fresh produce, dairy, meat, fish and poultry will be in long-term agreements

  • New ten-year agreement with Thanet Earth supporting investment in glasshouse capacity and technology. Enabling Sainsbury’s customers to buy British-grown cucumbers through the winter for the first time and strengthening supply resilience

  • Growing partnership with the Woodland Trust for a further four years, supporting farmers and growers across our supply chain to adopt agroforestry practices that improve farm resilience, enhance biodiversity and support sustainable food production

Helping to make good food accessible for all

• Continued to address food insecurity through strategic partnership with Comic Relief, supporting children and families facing hardship

• Supported ambition to raise £30 million for Comic Relief by 2030, launching first Move for Meals fundraising campaign. Colleagues, customers and suppliers raised £1.1 million, matched by Sainsbury's to donate a total of £2.2 million to Comic Relief

• Committed £8 million through partnership with Comic Relief to complement the Government's Holiday Activities and Food programme and create additional holiday club places for children

Resilient Tu Clothing performance and continued General Merchandise optimisation

• Tu sales down two per cent, reflecting tough comparatives and a subdued clothing market²³

• Outperformed the clothing market²³, reflecting strong progress on style perceptions²⁴, improved availability and best ever back-to-school performance, with sales up eight per cent

• Completed roll-out of clothing RFID²⁵, improving stock accuracy, product availability and operational efficiency

• Sainsbury’s General Merchandise sales down five per cent, primarily reflecting strategic decision to allocate more space to food and rationalise range, driving stronger stock efficiency, better availability, a simpler shopping experience and higher space productivity. Success of toys range reset completed last year, with fewer, better products, reflected in H1 sales up 13 per cent year on year.

Loyalty everyone loves

Nectar participation and digital engagement continue to grow, with more customers recognising the benefits of Nectar Prices, personalised value through Your Nectar Prices, targeted rewards and an expanding coalition of partners where they can earn and redeem rewards. The strength of this engaged, loyal customer base is fundamental to the success of Nectar360, where investment in market-leading Retail Media solutions is driving growth and supporting incremental profit generation.

Nectar Prices and personalised Your Nectar Prices continue to unlock value for customers

• Digital Nectar users up nine per cent²⁶

• Customers saved more than £16 on £80+ big trolley shop as they continue to access the great value offered by Nectar

• Your Nectar Prices continues to grow in popularity, with 350 million personalised offers per week and 17 per cent more customers accessing these on their favourite products each week²⁷

• Continued to engage with customers through digital campaigns such as Healthy Choice Challenge and Taste the Difference Challenge, supporting customers making healthier choices and driving trade up to our premium ranges

Creating more value for customers with Nectar partnerships

• Broadened Nectar ecosystem and enhanced customer value through existing partnerships, driving greater relevance and reward across customers' leisure and family spending

  • Expanded Nectar earning opportunities for customers through Uber Eats

  • Merlin partnership now offering customers double value for Nectar points, delivering on average £36 additional value per redemption transaction over the summer

  • Launch of Ambassador Cruise Line partnership, with customers able to earn up to 150,000 Nectar points

Leading the development of Retail Media in the UK

• Strong adoption of Pollen, Nectar360’s market-leading platform for planning, activating and measuring Retail Media campaigns. More than 600 campaigns delivered for around 100 clients

• Nectar360 is the first UK Retail Media business to be accredited and independently audited against IAB Europe Retail²⁸ Media Measurement Standards, reinforcing leadership in transparency, accountability and measurement

• Omnichannel campaigns continue to deliver strong results, including Diet Coke x The Devil Wears Prada campaign, which reached over eight million customers and generated a 3.7x incremental return on advertising spend²⁹

Expanding media network and capabilities

• Continued integration of Pollen and in-store media network, creating more connected omnichannel proposition across in-store, onsite and offsite channels. Expanded connected in-store media network to more than 3,500 digital screens – expecting to reach around 5,000 screens by year end

• On track to deliver at least £100 million of incremental profit over the three years to March 2027

More Argos, more often

The sale of Argos to Swift Partners will support the next phase of Argos' development, providing greater flexibility to accelerate its transformation programme, pursue its strategic priorities and unlock future growth opportunities. Swift will build on the strength of the Argos brand, multichannel model and store network, bringing expertise and investment, unlocking the future potential of Argos for its customers and colleagues.

Securing a stronger future for Argos

• Full year trading profit, reported as part of non-underlying discontinued operations, expected to be in line or ahead of last year

• Sales, now reported within non-underlying discontinued operations, down 1.8 per cent (excluding Marketplace GMV³⁰), partially reflecting highly competitive market and continued slower sales of bigger ticket items such as furniture, particularly during prolonged summer heatwave

• Sales also impacted by in-year transition of legacy storecard customers to new digital financial services proposition, with strong new customer take-up of proposition outweighed by transitional sales impact

• Successful launch of Marketplace offer. Number of sellers and product range will continue to expand, with 200,000 additional marketplace and supplier direct fulfilled products in Argos by financial year end

• On track to deliver accelerated cost savings target, offsetting investment in people, technology, logistics and stores

Save and invest to win

In the final year of our Next Level plan, we remain on track to deliver our £1 billion cost saving target and a total of £2.3 billion over the past six years. By moving from stand-alone initiatives to end-to-end improvements in processes and ways of working we are making our business more efficient and resilient and creating a strong foundation for future savings opportunities.

Investing in connected stores and modernising logistics

• SmartShop now available in all supermarkets, with 20 per cent more handsets year on year, supporting operational capacity and bigger basket trolley shops ahead of peak

• Connecting real-time data, AI-driven decision making and store execution to improve customer satisfaction and availability while reducing loss and increasing productivity

  • Enhanced SmartShop rescanning, improving identification of mis-scanned baskets, more targeted interventions and better customer experience

  • Self-checkout video analytics now in nearly 600 stores - continued roll-out across supermarkets and introduction into convenience stores

  • Good progress rolling out facial recognition technology following a successful trial which saw logged incidents fall by 46 per cent and more than 90 per cent of identified offenders not return

• Data-led stock replenishment capabilities helping stores identify and move available stock to the shop floor more efficiently, improving availability, reducing lost sales opportunities and simplifying replenishment

• Optimised price reduction algorithm rolled out to all stores, reducing waste and improving colleague efficiency. Already delivered double digit million pound saving

• More than 100 automated mobile robots now live at our Northampton warehouse, improving efficiency and increasing capacity in the ambient grocery picking operation

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