Sainsburys Reports Strongest Market Share in Nine Years as MS Cyber Issues Boost Sales

Britain’s second-largest grocer, Sainsbury’s, has reported its most robust market share performance in nine years, driven by strong demand for premium food offerings and an unexpected advantage from a cyberattack at rival Marks & Spencer that resulted in stock shortages.

The retailer witnessed retail sales growth, excluding fuel, of 4.9% in the 16 weeks to 21 June, with like-for-like sales climbing 4.7%, surpassing Barclays’ projected 4.2%. The disruption at M&S notably contributed to increased footfall at Sainsbury’s stores, particularly in the lunchtime trade segment.

Chief Executive Simon Roberts attributed the success to the company’s “food first” strategy, encompassing enhanced ranges in modernised stores, competitive pricing through the Aldi price match programme, and the effectiveness of the Nectar loyalty scheme. The premium Taste the Difference range demonstrated particularly impressive performance, with sales surging 18% as consumers maintained their preference for home dining.

Argos, the group’s general merchandise arm, experienced a revival with 4% sales growth, while clothing division Tu posted an 8% increase, outperforming the broader market. The company has maintained its full-year guidance, projecting approximately £1 billion in underlying retail operating profit and over £500 million in retail free cash flow.

The retailer faces ongoing challenges from inflation, with Roberts highlighting significant cost pressures including a £140 million impact from April’s national insurance changes, a 7.5% increase in labour costs, and £55 million in extended producer responsibility charges. Despite these headwinds, the company remains focused on mitigating inflationary impacts while maintaining competitive pricing.

RBC analysts expressed confidence in Sainsbury’s position within the UK food retail sector, noting the company’s improved price-value credentials and strategic focus on range optimisation. Shore Capital suggested that continued trading progress could lead to enhanced financial expectations, although shares closed down 1% at 286½p.