Sainsbury’s has seen its retail sales increase by 6.8% year-on-year, rising to £30.6bn in the year to 2 March 2024.

The supermarket also saw its group sales jump by 3.8% to £36.3bn, while its operating profit reached £966m, an increase of 4.3%, driven by profit growth and costs savings across the year.

Furthermore, the retailer’s underlying profit before tax reached £701m, increasing by 1.6% year-on-year, although its statutory profit before tax dropped by 15.3% to £277m, as a result of the restructuring of its financial division.

Chief executive at Sainsbury’s, Simon Roberts, said: "Our food business is firing on all cylinders. We have the best combination of value and quality in the market and that's winning us customers from all our key competitors, driving consistent volume market share growth as more customers choose us for their weekly shop and all their special occasions.

“We've done that by relentlessly investing in price; £780m over the past three years. We know it's still tough out there for so many households and we're doing all we can to save money right across our business to keep prices low - we have reduced 4,000 products over the last year alone. Nectar Prices has also been a game changer for customers, saving them £12 on a typical £80 shop. And we're not compromising on quality: we've doubled our rate of innovation and Taste the Difference is performing especially well.”

In the group’s outlook for the latest financial year, it said it is “confident of delivering strong profit growth”, and expects to deliver an underlying operating profit of between £1.01bn and £1.06bn in its retail division, an increase of between 5% and 10%.

Furthermore, it stated that it expects to generate a retail free cash flow of at least £500m.

Having also suggested it is looking to “change the scope” of its financial services business over the course of the financial year, Sainsbury’s said its core banking products will continue to be impacted by higher funding costs. The supermarket has predicted a contribution of between break-even and £15m in this division.

Lead equity analyst at Hargreaves Lansdown, Sophie Lund-Yates, concluded: “Sainsbury’s has delivered a strong set of results amid its large-scale strategy shift. Crucially, the 6.8% increase in retail sales has been driven by volume. This is a more resilient strategy than price, but can often be more difficult to achieve. The successes are very much showing up in the numbers, with underlying retail operating profits climbing over 4%.

“Despite the positivity, Sainsbury’s does carry much higher exposure to general merchandise, which isn’t faring so well. This is partly because of where we are on the economic merry-go-round, but can also partly reflect specific stocking decisions. Ultimately, Sainsbury’s has come on leaps and bounds within a very competitive arena, and there’s optimism its volume-led approach can continue this year.”

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