J Sainsbury celebrated its biggest ever Christmas, demonstrating remarkable growth in grocery market share and superior volume performance ahead of the industry, as revealed in a business update released on Friday. For the 16 weeks culminating on January 4, total retail sales increased by 2.7%, while like-for-like sales, excluding fuel, rose by 2.8% year over year.
This performance is particularly noteworthy as Sainsbury's marked significant progress in grocery market share for the fifth consecutive Christmas, with holiday sales climbing 3.8% at Sainsbury's and by 1.1% at Argos. Chief Executive Simon Roberts attributed this success to the company’s unrivaled blend of quality, value, and service, stating, “We have achieved seven consecutive quarters of volume performance ahead of the market, further accelerating our two-year volume growth.” This strong upward trend is complemented by the retailer's recent announcement of a 5% pay raise for hourly-paid staff in its retail division, reflecting its commitment to employee welfare.
Starting in March, Sainsbury's and Argos employees will see their hourly wages rise to 12.45 pounds, increasing to 12.60 pounds by August. Those based in London will have their hourly earnings adjusted to 13.70 pounds and 13.85 pounds during the same periods. Looking forward, the company has revised its expectations for the retail underlying operating profit for fiscal 2025 to hover around the midpoint of its guidance range, projected between 1.01 billion pounds sterling to 1.06 billion pounds, in line with market consensus.
In a promising development, the total expected underlying operating profit from financial services is 30 million pounds, exceeding the prior guidance range which was set at 15 million pounds to 25 million pounds. Analysts from RBC Capital Markets have branded Sainsbury’s a strong player in the UK's food retail sector, emphasizing the retailer's advancements in enhancing price-value credentials.
They noted, “SBRY has a strong track record of cost efficiency, and we expect further cost savings to materialize in the near term. Its balance sheet remains robust and the business continues to generate cash, supporting the potential for continued additional cash returns.” However, shares did see a decline of nearly 3% on Friday morning, reflecting broader market conditions..