Sainsbury's Wins Back Customers from Aldi, Lidl; Raises Profit Forecast Amid Falling Food Inflation

Sainsbury's profits sustain despite price cuts; CEO credits boost in grocery sales and ongoing initiatives to attract customers from retail competitors.

Sainsbury's, the UK's second biggest supermarket chain, is regaining customers from discount rivals Aldi and Lidl despite economic pressures causing a shift to cheaper stores. Grocery sales at Sainsbury's were up by 10% in the six months to September 16, 2023, compared to the previous year.
Although its profit before tax dropped by 27% to £275m, primarily due to a decrease in clothing sales, Sainsbury's expects a boost in its full-year profits. The company forecasts its profits to be between £670m and £700m, up from the previous guidance of £640-700m.
The supermarket attributes this growth not just to price rises but to a significant increase in the number of items that customers have been purchasing. It is also noted that customers who used to shop exclusively at discount supermarkets are now buying items at Sainsbury's.
Simon Roberts, Chief Executive of Sainsbury's, attributes this growth to the company's continual efforts to reduce costs and lower prices on products that customers buy most often. Sainsbury's has spent £118m since March on lowering prices and absorbing cost increases.
On a larger scale, Sainsbury's current growth played a significant role in increasing competition in the UK grocery market. As a result of this, the company predicts that food inflation will continue to fall and that savings will be passed onto the customers.