Interim Results for the 28 weeks ended 13 September 2025

Interim Results for the 28 weeks ended 13 September 2025

Winning combination of value, quality and service driving continued market share gains

Simon Roberts, Chief Executive of J Sainsbury plc, said: “We started this year with one clear priority - to sustain the strong competitive position we have built over the last five years. We have delivered on this in the first half, with focused and effective investment to ease cost-of-living pressures, keeping price inflation behind the wider market and delivering our winning combination of great value, trusted quality and leading service. This has driven continued grocery volume growth ahead of the market for a fifth consecutive year and a profit performance ahead of our expectations.

"We planned for a strong Summer and we really delivered, with leading product innovation and outstanding fresh food availability when demand was highest throughout the hot weather. At Argos we delivered a good seasonal performance, grew market share and improved profitability. A huge thank you to all our hard working and dedicated colleagues, suppliers and farmers who make this possible every day.

“We’re investing where it matters most with Aldi Price Match on everyday essentials and bringing personalised Your Nectar Prices to all supermarket customers. Customers saved an average of £14 on an £80+ big weekly shop with Nectar Prices. Value perception is improving across supermarkets, convenience stores and online. We’ve continued to invest in innovation too, including launching our new Taste the Difference Discovery ranges for restaurant quality food at home. In its 25th year, more and more customers are shopping Taste the Difference, driving the biggest premium own-label share gains in the market.

“Our offer has never been stronger. So while we expect the market to remain highly competitive, our momentum gives us real confidence as we head into Christmas and we have strengthened our profit guidance today."

Financial Highlights

• Sainsbury’s sales (excluding fuel) up 5.2%, with Grocery sales growth of 5.3% and Sainsbury’s General Merchandise & Clothing sales up 3.3%. Argos sales up 2.3%, Fuel sales down 11.3%
• Retail underlying operating profit £504m, ahead of our expectations and in line with last year, with strong trading and cost savings delivery enabling focused investments in value, customer service and quality and offsetting higher employment and regulatory costs and disruption from space reallocation activity
• Statutory profit after tax £165m (HY 2024/25: £76m). Non-underlying items of £(72)m on a post-tax basis predominantly relate to Retail restructuring costs and the phased withdrawal from Financial Services
• Retail free cash flow £310m. On track to exceed £500m for the full year
• Bank disposal proceeds will now exceed £400m, higher than originally expected. £400m will be returned to shareholders via a £250m special dividend and £150m incremental share buyback. Of the £150m, £50m will be added to the previously announced £200m buyback in financial year 2025/26 and the remaining £100m will be added to the core buyback in financial year 2026/27
• Interim dividend of 4.1 pence per share, up 5%
• Total cash returns to shareholders in financial year 2025/26 now expected to exceed £800m

2025/26 Outlook
Our focused and effective investment in value, quality and service in the first half further strengthened our customer proposition relative to competitors and helped deliver a sales and profit performance ahead of our expectations. This means that, while we will continue to make balanced choices to invest and sustain the strength of our competitive position through the most important trading period of the year, we now expect Retail underlying operating profit of more than £1 billion. We continue to expect to deliver Retail free cash flow of more than £500 million.

Enhanced cash returns: Special dividend, Ordinary dividend and Share buyback
We now expect net cash proceeds from the disposal of our banking operations to exceed £400 million, reflecting very good progress with our phased withdrawal from core Banking products. As previously announced, we will return £250 million of these proceeds to shareholders via a special dividend of 11.0 pence per share. This will be paid on 19 December 2025 to shareholders on the Register of Members at the close of business on 14 November 2025.  We are no longer proposing a share consolidation alongside payment of the special dividend.

We will additionally return £150 million of bank disposal proceeds through share buybacks, with £50 million to be added to the core £200 million buyback in financial year 2025/26 and £100 million to be added to the core buyback in financial year 2026/27.

We announced in April 2025 that we would buy back £200 million of shares in the financial year 2025/26. We bought back c.57 million shares with an aggregate purchase price of £158 million in the period between 22 April 2025 and 12 September 2025. We will complete the remaining £42 million of this programme by the end of the 2025/26 financial year as well as the additional £50 million announced today.

The Board has recommended an increased interim dividend of 4.1 pence per share (HY 2024/25: 3.9 pence). Consistent with prior years, this represents 30 per cent of the prior year’s full year dividend per share. This will be paid on 19 December 2025 to shareholders on the Register of Members at the close of business on 14 November 2025.

Balanced choices delivering strong momentum
Halfway through the three-year plan that we set out in February 2024, we are making good progress against our commitments, further strengthening our customer proposition relative to competitors whilst navigating high levels of operating cost inflation. This is delivering continued strong momentum as more and more customers are trusting us to consistently deliver great value alongside the outstanding quality and service they have always expected from Sainsbury’s.

We continue to strengthen our capabilities, having made key appointments across retail, clothing, technology and data as well as accelerating the Argos transformation through dedicated leadership. We have invested further in hourly colleague pay and made two pay increases in March and August of this year while investments in technology and automation are driving sustained benefits in stores and logistics. We have a healthy pipeline of new initiatives to deliver future efficiency improvements.

We have invested in growing our food footprint in existing supermarkets and through new store openings in key target locations to ensure that more customers are able to access the best of our ranges, building on our competitive advantages in product range and quality.  We continue to grow long-term strategic relationships with key food suppliers, ensuring resilience and quality of supply and support for ongoing product innovation and sustainability improvements.  We are capitalising further on the strong foundations we have built across Nectar, extending access to personalised Your Nectar Prices to more customers and launching Nectar360 Pollen, our world class retail media platform that will deliver outstanding results for clients and strong revenue growth for Nectar360.

Our investment in the business is supported by the strength of our balance sheet and consistent cash generation. This additionally allows us to deliver healthy returns to shareholders. We anticipate returning more than £800 million to shareholders this financial year through dividends and share buybacks.

Across the business, we remain confident on delivering on the eight commitments that we made in February 2024 over the life of the Next Level Sainsbury’s plan:

Our progress against these commitments will be driven by our four strategic outcomes: First choice for food, Loyalty everyone loves, More Argos, more often and Save and invest to win.

First choice for food
Focused investment in our winning combination of value, quality and service delivered our strongest ever customer offer this Summer, resulting in our fifth consecutive year of market outperformance⁵. We have built a unique position from which we are consistently balancing great value and trusted quality for customers, whilst delivering leading service⁶. As a result, we continue to benefit from switching gains from competitors across the whole market⁷ as more and more customers choose Sainsbury’s for their big trolley, main shopping mission⁸. We now have nearly one million more loyal primary customers than four years ago, with primary customer growth significantly ahead of key competitors⁹. We are well set to continue to build on our Grocery momentum, with strong plans in place to deliver for customers through the peak Christmas period.

Consistently building a stronger Sainsbury’s: focused and effective investment in our customer offer driving continued momentum and market share gains

• Our focus on great value for customers, wherever they choose to shop with us, is delivering. We have strengthened our competitive position over the first half¹⁰, inflating behind the market¹¹, and our value perception is improving in supermarkets, convenience and online¹²
• We extended Aldi Price Match to around 800 of the products that customers buy most often and delivered more personalised value to more customers through the extension of Your Nectar Prices to all supermarket checkouts (previously only available on Groceries Online and SmartShop)
• Over the summer we amplified our value messaging alongside a Taste the Difference brand campaign that celebrated ‘everyday trade ups’, delivering a very positive customer response¹³ with more and more customers shopping with us for their full trolley⁸. 65 per cent of customers shopped both Aldi Price Match and Taste the Difference products in the same basket during the half¹⁴
  
  

Further strengthening our leading reputation for delivering outstanding quality at affordable prices

• Our food quality and innovation sets our offer apart. We are widening the gap versus competitors on quality perception¹⁵ as we work ever more closely with suppliers to develop new ranges. We launched more than 600 new products this Summer, around half of which were Taste the Difference
• We outperformed the market during key Summer occasions¹⁶ , with leading innovation and a great value three for £8 across our Summer deli ranges. This contributed to Taste the Difference fresh sales growth of 18 per cent and the biggest Premium Own Label share gains in the market¹⁷
• We have recently launched our new Taste the Difference Discovery ranges of expertly-created, restaurant quality meals and premium speciality ingredients including British Wagyu and Aberdeen Angus steaks and artisan meats, cheeses and wines. Customer favourites include the Hot Chicken Tikka Masala in our range of Modern Indian ready meals and the Poachers Pie in our Modern Classics range. Since launch, premium dine in sales have grown by almost 40 per cent and we are excited about expanding these ranges as we head into the festive period
• We reinvented our food-to-order business ‘Occasions by Sainsbury’s’ in March, combining this service with our groceries online platform so that customers can shop made-to-order items alongside their everyday groceries, helping drive bigger online shopping baskets

Growing food space and bringing more of our range to more customers

• We are growing our food space through reallocation of space in existing supermarkets, selective addition of supermarkets in key target locations and continued growth of our convenience store portfolio. This will be an increasing contributor to market share growth as new space matures and the benefits of space reallocation build while disruption eases
• During the first half, we opened six new supermarkets, including Cromer and Lowestoft (the first of our 13 Homebase conversions) and two Co-op conversions in Felixstowe and Brightlingsea. Sales in these new stores are on average almost 20 per cent ahead of expectations and are on track to deliver the returns projected. We additionally opened 12 new convenience stores. Subject to final planning consents, we expect to open another six supermarkets (including three Homebase conversions) in the second half and around 18 more convenience stores. Next year we anticipate opening up to 12 new supermarkets, of which eight will be the remaining Homebase conversions, and at least 25 new convenience stores
• We have invested selectively in our existing supermarkets, adapting our refit and space reallocation plans to the trading profile and potential of different supermarkets and rolling out rapidly the most successful elements. We have improved the prominence of Nectar Prices and the look and feel of our centre aisles, extended range, re-located and enhanced presentation in Beers, Wines and Spirits and have made our Food to Go fixtures more compelling and easier to shop
• We are pleased with the results in the stores we have invested in, with higher food sales, higher trading intensity and a strong customer response to the range improvement. By the end of this financial year we expect to have invested in 70 of our existing supermarkets
• In total we expect space reallocation together with new supermarkets and convenience stores to have added around one million square feet of grocery space by the end of next year, an increase of around six per cent over three years
• Convenience¹⁸ sales increased 5.2 per cent, primarily driven by like for like sales growth, reflecting a strong performance through the warm and dry Summer months, benefits of range improvements made last year and a growing contribution from OnDemand sales
• Groceries Online¹⁹ sales increased 11.4 per cent, with continued acceleration of OnDemand sales and a strong underlying volume performance
  

Playing a leading role in creating a more sustainable food system

• We are working to tackle food poverty in our communities. Through our partnership with Comic Relief, we raised over £2.6 million this summer, which will fund one million meals for children and families experiencing food poverty during the school holidays and we have funded more than 100,000 holiday club places across the UK since March. We are also donating £3 million to Comic Relief to help distribute over five million meals during the winter months through charities such as FareShare, City Harvest and the Felix Project
• We are supporting farmers and suppliers by giving them greater stability through long-term partnerships and cost of production models. Our Dairy Development Group has recently agreed a new financial model in response to rising costs and upcoming environmental regulation, including over £9 million of investment from Sainsbury’s to support 150 dairy farms
• This year we have switched all our by Sainsbury’s black tea to Fairtrade and as a result we are now the biggest UK grocery retailer of Fairtrade tea. Farmers will receive a guaranteed price and over £1 million a year in Fairtrade Premiums. We’ve also launched a Resilience Building Initiative with our key tea producers and are working to expand this to coffee and bananas to further strengthen our supply chains and support communities
• In collaboration with our coffee supplier, we have supported a collective of women farmers in Colombia to adopt a new growing model that uses low-carbon fertiliser, water recycling and native tree planting to build greater resilience in our coffee supply chain

Improving performance in the products and services that sit alongside our food offer

• Tu Clothing sales grew 7.8 per cent in H1, outperforming the market for the fifth consecutive quarter²⁰, driven by range and availability improvements, strong online growth and our best ever Back to School performance. Our customer offer now combines great value with quality design and on-trend desirability, driving improved customer perception metrics²¹. This has helped deliver an improvement in full price sales
• General Merchandise sales declined in line with expectations as we reduce General Merchandise space in our stores to support our More for More Food plan. This has improved trading intensity and profitability
• Smart Charge, our ultra-rapid electric vehicle (EV) charging network, delivered strong sales and profit growth, with sales per site increasing, reflecting our industry leading reliability score²² and improved customer offer. We operated in 79 locations at the end of the first half, giving customers access to more than 650 EV charging bays

Stronger than expected proceeds from Bank disposal process, good progress on future Financial Services income streams

• We have made very good progress with our phased withdrawal from core Banking products, with stronger than anticipated net proceeds from divestments alongside the establishment of a number of arrangements with dedicated, specialist financial services partners. These will allow us to benefit from long-term financial services income streams that have a stronger connection to our retail offer. Profits from these income streams will build from next year and we continue to expect Argos Financial Services income, together with commission income from ongoing Care, insurance, travel money and ATM arrangements, to deliver sustainable annual profit of at least £40 million by February 2028
• During the first half we completed the sale of Sainsbury’s Bank core banking products to NatWest, migrated the ATM business to NoteMachine, signed an agreement with Allianz UK on car and home insurance and agreed the sale of the Sainsbury’s Bank Travel Money business to Fexco Group. Together with the Argos Financial Services card portfolio, Travel Money has now been classified as a discontinued operation¹, reflected in the restatement of Financial Services underlying operating profit and a change to our short term profit guidance, where we now expect Financial Services underlying operating profit contribution to be broadly breakeven in 2025/26

Loyalty everyone loves
Connecting with our customers through Nectar is more important than ever and we remain focused on delivering more personalised, rewarding and integrated loyalty. Nectar is at the centre of how customers get great value at Sainsbury’s. Our unique combination of Nectar Prices across nearly 10,000 products, Your Nectar Prices on up to 10 personalised items each week, Nectar Points and Nectar Offers means that customers can save more than £450 a year with Nectar, as well as collecting over £170 worth of Points.

This is supporting the growth of our loyal, primary customer base, in turn benefiting our Nectar360 retail media business, enabling us to support over 900 clients and media agencies with the delivery of more tailored and targeted marketing to customers. Within a fast-growing UK retail media market, Nectar360 continues to stand out as a market leader and we are ahead of our plan to deliver at least £100 million incremental profit over the three years to March 2027.

Nectar is transforming the way that customers maximise value at Sainsbury’s

• We have rolled out Your Nectar Prices across all our supermarket checkouts, making personalised savings accessible to millions more customers. Customers increasingly recognise personalised savings as a key reason to shop with Sainsbury’s
• Nectar Prices are a vital component of our value offer. More and more customers are shopping Nectar Prices, with customers saving an average of £14 on an £80+ big weekly shop
• We are using interactive challenges on the Nectar app to nudge customers towards healthier food choices. Over the summer we ran a Healthy Choice challenge where customers were incentivised to shop products with a healthy choice logo, supporting increased recognition of the logo and delivering an uplift in healthy choice sales

Investing at scale to accelerate Nectar360 and revolutionise retail media

• We have started the roll-out of our new unified platform Nectar360 Pollen, giving clients and agencies the ability to access the full potential of our retail media network. Designed and built in-house, Pollen brings all elements of running an omnichannel retail media campaign into one seamless platform. It brings together AI-driven planning, real-time optimisation and integrated measurement tools, empowering marketeers to build more impactful campaigns, driving better return on advertising spend and stronger customer engagement. Early feedback from clients is extremely positive, calling out the usability of the platform and the benefits of greater visibility and control
• We are scaling our connected retail digital screen network – connecting our customers with their favourite brands in-store. We are on track to roll out centre aisle screens to 200 stores by the end of this year, at which point we will have over 2,500 screens connected through a single content management system, which will in time be integrated into Pollen. Our large format instore screens are already delivering around eight per cent brand sales uplift, demonstrating the value of digital formats in-store as brands look to build awareness of their ranges
• The Nectar coalition continues to grow with the launch of a new partner in the charity sector, FareShare, whose mission is to address food waste and food poverty. Customers will be able to provide support through cash donations or by donating points, at the same time as earning 10 Nectar points for every £1 donation they make

More Argos, more often
We are making good progress with the Argos transformation plan, with higher sales, market share growth²³ and improved profitability, particularly against a second quarter last year where strategic clearance activity increased sales but diluted trading margins. Sales grew by 2.3 per cent, supported by warm and dry Summer weather in an otherwise subdued, competitive and deflationary market. We continue to strengthen our online offer, improving the digital customer journey and driving higher online traffic and basket size. We have a strong trading plan in place as we head into the important Black Friday and Christmas trading period.

Strategic progress

• We are delivering more inspiring choices for customers through extending our ranges and forming deeper brand partnerships with key suppliers. We continue to grow our Supplier Direct Fulfilled offer, introducing more than 6,000 new products so far this year, including new premium brands such as Oura, and have recently enabled customers to choose to collect in store
• Customers continue to trust Argos to deliver great value, with our Big Red events supporting improved value perception²⁴. Alongside this, we have increased the visibility of value-added services, including pre-order and trade-in, and we have launched a new partnership with Airtasker. We are also trialling Argos Plus, a 12-month subscription for free delivery on all orders greater than £20
• With around 80 per cent of all Argos sales now through digital channels, we are increasingly focused on personalisation within the Argos digital experience, providing customers with relevant recommendations based on their browsing behaviour and inspiration to support bigger basket shopping. Alongside this, we have upgraded the Argos App, including enhancing product pages and improving findability, enabling app exclusive offers and making it easier and faster for app customers to collect their products. More customers are using the app as a result, with positive customer feedback and strong revenue growth as we grow loyalty and encourage greater shopping frequency
• We are growing brand awareness and consideration of Argos as a destination for desirable, premium products, driving greater engagement through social channels and launching our own podcast
• Having focused in recent years on relocating the Argos estate from standalone stores to stores and collection points inside Sainsbury’s, we are now focusing on optimising our 1,100 points of presence to provide the best customer journey at the same time as reducing cost to serve. We are improving the speed and ease of collection for customers, giving more self-service options and implementing an improved service model through modernising in-store technology
• We are additionally optimising our market-leading delivery to bring greater efficiency and modernising our supply chain through a new local fulfilment centre warehouse system

Save and invest to win
We are on track to deliver £1 billion of cost savings over the three years of the Next Level plan, with capital investments in high returning technology and infrastructure programmes and a strong pipeline of cross-functional savings activity driving structural cost reduction.

• In the first half we closed the remainder of our in-store cafes, hot food, pizza and patisserie counters and converted our in-store bakery operations to a bake-off model, delivering significant cost savings, improved bakery ranges and creating more space for fresh food
• We have finished the commissioning and testing of our physical large-scale automation and new warehouse management system in Daventry. This has now gone live and will ultimately house both Argos and Sainsbury’s general merchandise products from 2026. This will deliver significant savings through the previously announced closure of two regional warehouses in addition to increasing the capacity, productivity and throughput of the Daventry site
• We are further extending the benefits of our machine learning forecast platform within our supply chain, through introducing a supplier collaboration app. This streamlines and simplifies the supplier journey by automating supply chain interactions, providing greater visibility, self-service functionality and the capacity to access longer-term forecasts
• We are tackling shrink costs through the rollout of self-checkout video analytics across our supermarket store estate. This is currently in operation in more than 200 stores and is outperforming our expectations. We expect to be live in 400 stores by the end of the financial year
• We are committed to creating safe, secure and welcoming environments in our stores and we are doing everything possible to protect our colleagues and customers. In September we started a two store trial in partnership with Facewatch using facial recognition technology to identify serious offenders entering our stores. We will roll this technology out nationwide if the trial is successful
• We continue to invest in our digital infrastructure, enabling us to support a more digital store of the future and implement AI-driven efficiency opportunities in stores, including reduced energy consumption

Sales performance (exc. VAT)

Notes
Certain statements made in this announcement are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward-looking statements. They appear in a number of places throughout this announcement and include statements regarding our intentions, beliefs or current expectations and those of our officers, directors and employees concerning, amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the business we operate. Unless otherwise required by applicable law, regulation or accounting standard, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

A webcast presentation and live Q&A will be held at 9:15 (GMT). This will be available to view on our website at the following link: https://sainsburys-2025-26-interim-results.open-exchange.net/

A recorded copy of the webcast and Q&A call, alongside slides and a transcript of the presentation will be available at www.about.sainsburys.co.uk/investors/results-reports-and-presentations following the event.

Sainsbury’s will issue its 2025/26 Third Quarter Trading Statement at 07:00 (GMT) on 9 January 2026.

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