Sainsbury’s has reported a 5.2% rise in total sales in its first half results, which climbed to £13.6bn.

The supermarket oversaw grocery sales growth of 5.3% in the H1 period, as well as 3.3% growth in its general merchandise and clothing division, and 2.2% sales growth for its Argos business.

Sainsbury’s was releasing its interim results for the 28-week period to 13 September, and revealed a retail underlying operating profit £504m, up marginally from last year by 0.2%.

The supermarket said a “focused and effective investment in value, quality and service” in H1 had strengthened its customer proposition relative to competitors and helped deliver a sales and profit performance ahead of its expectations.

It added that by sustaining its position through Christmas, the company’s most important trading period of the year, it is now expecting a retail underlying operating profit of more than £1bn across the 2025/26 financial year.

Sainsbury’s chief executive, Simon Roberts, 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.”

Sainsbury’s also revealed that the net cash proceeds from the disposal of its banking operations to NatWest will now exceed £400m. The supermarket confirmed it would return £250m of this to shareholders via a special dividend of 11p per share.

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

Sainsbury’s saw its share price edge up by over 2.5% in the morning’s early trading.

Head of markets at AJ Bell, Dan Coatsworth, commented that Sainsbury’s latest results give the impression of “a business in a sweet spot”.

“Profit guidance has been upgraded, it has announced a special dividend and a boost to its share buyback scheme, and the dividend has gone up by more than the rate of inflation,” he added.

“Sainsbury’s shares have enjoyed a good run since April, but the lacklustre market reaction to its half-year results would suggest investors might be starting to wonder if the supermarket has reached its peak.”

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