Interim Results for the 28 weeks ended 17 September 2022

November 3, 2022

Interim Results for the 28 weeks ended 17 September 2022

Strategy delivering for customers, colleagues, communities and shareholders

Simon Roberts, Chief Executive of J Sainsbury plc, said: Two years ago we launched our plan to put food back at the heart of Sainsbury’s. We committed to improve shareholder returns by creating a simpler business and reducing costs to invest in lower prices, food innovation and maintaining colleague and customer satisfaction. We have grown market share in both grocery and general merchandise and investment in our stores and colleagues is supporting leading supermarket customer satisfaction and availability. Profits are significantly higher than pre-Covid levels and we are generating strong cash flow, supporting debt reduction and dividend payments.

“We really get how tough it is for millions of households right now. Customers are watching every penny and every pound and we know that they are relying on us to keep food prices as low as we can. We will have invested more than £500 million by March 2023 in keeping prices lower by cutting our costs at a faster rate than our competitors1, meaning we have more firepower to battle inflation. Over the past year and a half we have consistently passed on less price inflation than our competitors and I am confident we have never been better value. Argos is also performing well in a market where customers are looking for reassurance that they are getting great value and availability.

“We were the first supermarket to give our colleagues a second pay rise this year and have invested £150 million to support them and drive outstanding service. I want to thank all my colleagues for their hard work and dedication and for everything they are doing to deliver for our customers. Our strong results are testament to the outstanding commitment and contribution from every member of our team.”

Financial Highlights

  • Grocery sales up 0.2 per cent in H1. Strong growth in Q2 of 3.8 per cent as lockdown comparatives eased, market price inflation accelerated, customers responded well to the strength of our offer and we benefited from warm weather. Grocery sales were 9.3 per cent higher than H1 19/20
  • General merchandise sales down 6.1 per cent across H1 but up 1.2 per cent in Q2, driven by improved availability, favourable summer weather and strong market share gains. Growth was driven by categories such as consumer electronics and seasonal products
  • Statutory Group sales (excluding VAT) up 4.4 per cent, with fuel sales up 39.5 per cent. Like-for-like sales (excluding fuel) down 0.8 per cent, with Q2 up 3.7 per cent after a decline of 4.0 per cent in Q1
  • Retail operating profit down 9 per cent, reflecting our investment in value, reduced grocery and general merchandise volumes post-pandemic and higher operating costs, partially offset by a higher fuel contribution
  • Underlying profit before tax of £340 million, down 8 per cent; Financial Services operating profit of £19 million, flat year-on-year, and finance costs 9 per cent lower. UPBT up 43 per cent versus H1 19/20
  • Statutory profit before tax of £376 million, down 29 per cent, reflecting higher exceptional income in the prior year from settlement of legal disputes
  • H1 net funds balance £361 million. Strong retail free cash flow of £759 million, up 37 per cent, reflecting higher grocery sales and more typical seasonal working capital inflows against last year’s impact of Covid unwind. On track to deliver guidance of at least £500 million free cash flow in FY22/23
  • Interim dividend of 3.9 pence, up 22 per cent year-on-year
  • Guidance unchanged: continue to expect FY22/23 underlying profit before tax of between £630 million and £690 million

Strategic highlights

  • Food First: Strong grocery volume market share performance and only full choice supermarket to grow volume share versus pre-pandemic2. As customer shopping habits return to normal, online sales are down, but we are gaining overall grocery market share as online customers return to shop in our stores3
    • Value: Consistently inflating behind the market4, driven by more than £500 million investment over two years to keep prices low. Continuing to strengthen value position versus competitors; value index versus Aldi has improved by 400 basis points in the past 12 months5
    • Our mix and basket size trends are proving more resilient than competitors and we are seeing less switching to Aldi and Lidl than all other full choice supermarkets6, reflecting the strength of our brand and customer base
    • Innovation: Launched over 600 new products and on track to launch 1,200 new products by the end of this year. Sales of new Summer Editions products exceeded expectations, over 70 per cent more products in our Autumn Editions range this year. Launching 300 new Christmas products, over 50 per cent of which are Taste the Difference. Taste the Difference is outperforming the market7 with H1 sales are up 14 per cent versus pre-pandemic, as customers choose to treat themselves at home
    • Service: £150 million annual investment in colleague pay and benefits to support colleagues with the cost of living and drive outstanding service. We have given hourly paid colleagues two pay rises this year, as well as free food during shifts and offered all colleagues improved discounts. We are making significant investments to enhance our stores, which are attracting more customers as shopping behaviours normalise post-pandemic, driving strong satisfaction scores in supermarkets ahead of competitors8
  • Brands that Deliver: We are building brands that deliver both for our customers and for our shareholders. Argos is considerably more profitable versus pre-pandemic and over 10 million customers are now registered with the Nectar app. Habitat is growing strongly and Tu’s great value fashion continues to win customers. Sainsbury’s Bank is delivering on its strategic objectives, focused on providing financial services products for Sainsbury’s and Argos customers
    • Argos delivered market outperformance9 and is more resilient than competitors. Argos sales grew 1.6 per cent in Q2. By focusing on investing in our brands and developing core capabilities, we have improved availability and range. Hot weather supported sales of seasonal and electronic goods over the Summer
    • Tu clothing full price sales remain above pre-pandemic levels. Womenswear dress sales up 40 per cent
    • Continued focus on building the Habitat brand with strong sales growth in Habitat Kids and improved customer satisfaction scores10
    • Over 10 million customers have downloaded the Nectar app; My Nectar Prices is helping customers save over £100 a year. We now expect Nectar360 to deliver incremental profits of at least £90 million by March 2026, up from previous guidance of £60-70 million
    • Good progress against plan to simplify and strengthen Financial Services reflected in solid performance despite challenging market conditions
  • Save to Invest: Strong delivery of structural cost savings. We expect to deliver over £1.3 billion of cost savings in the three years to FY23/24, doubling the run rate from the three years to FY19/20. This is helping mitigate higher than expected operating cost inflation.
  • Plan for Better: We are making good progress on our Plan for Better. We have removed ‘best before’ dates from 100 more products and, as part of our commitment to Help Everyone Eat Better, at least 75 per cent of products price matched to Aldi are a healthy choice. We have distributed over six million meals in partnership with Neighbourly in the last year and introduced refreshed Human Rights commitments. We have reduced greenhouse gas emissions within our own operations by 44.5 per cent year-on-year, supporting our accelerated commitment to be Net Zero by 2035

H1 Financial Summary




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Trading momentum has remained strong in the first few weeks of the second half and we have continued to make volume market share gains. This reflects continued investment in our customer offer, supported by the strength of our financial position and cost savings programme.

We are well placed through the peak trading period and into next financial year to support customers as they manage further cost of living pressures. We are half way through a £1.3 billion cost saving programme that has doubled the run rate of previous years and we are confident in our competitive position in the face of macro challenges and operating cost inflation.

We continue to expect underlying profit before tax in FY22/23 to be between £630 million and £690 million and to generate retail free cash flow of at least £500 million.

Certain statements made in this announcement are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward-looking statements. They appear in a number of places throughout this announcement and include statements regarding our intentions, beliefs or current expectations and those of our officers, directors and employees concerning, amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the business we operate. Unless otherwise required by applicable law, regulation or accounting standard, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

A webcast presentation and live Q&A will be held at 9:00 (GMT). This will be available to view on our website at the following link:

A recorded copy of the webcast and Q&A call, alongside slides and a transcript of the presentation will be available at following the event.

Sainsbury’s will issue its 2022/23 Third Quarter Trading Statement at 07:00 (GMT) on 11 January 2023.


 Investor Relations  Media
 James Collins  Rebecca Reilly / Victoria Durman
 +44 (0) 7801 813 074  +44 (0) 20 7695 7295

Food First
We are focused on building on our strong brand heritage and reputation for quality, range and innovation while lowering prices and offering consistent value for money in an inflationary environment. Our strategy is delivering; we are improving the value we provide for customers, there are more new products on our shelves and our colleagues are delivering improved customer service. We are winning market share and growing our grocery sales.


  • We have consistently inflated prices behind competitors, both overall and on the best-selling items that are most important to customers11. Our value position across the whole basket continues to improve versus competitors, including improving by 400 basis points versus Aldi in the last 12 months5. We announced our biggest ever September investment in food of £60 million as part of our commitment to invest £500 million by March 2023
  • We are matching Sainsbury’s quality with Aldi prices on 240 of our most popular products and we recently increased the number of own-brand products in Price Lock by 20 per cent as more customers switch from branded to own-brand products
  • We have improved the visibility in store and online of our Special Offers and increased our meal bundles, driving improved customer satisfaction with our promotional offer
  • Our mix and basket size trends are proving more resilient than competitors and we are seeing less switching to the limited choice supermarkets than the other full choice supermarkets, reflecting our improving value position and the strength of our brand and customer base6

Quality and Innovation

  • We are on track to launch 1,200 new products this year, having already created over 600 new products in H1. Summer Editions sales were up over 30 per cent year-on-year
  • We also launched our second Autumn Editions range with over 70 per cent more products than last year, including our Stanley Plum Tart and Tuscan Pork Ragu. We will launch 300 new Christmas products and 50 per cent of these will be Taste the Difference
  • Taste the Difference sales are up by 14 per cent on a three-year basis. We launched 160 new Taste the Difference products, up 40 per cent year-on-year and we outperformed the market overall7 and at key events such as Easter and the Queen’s Jubilee. We also launched 21 new Inspired to Cook products to help customers cook tasty food at home
  • Customer satisfaction scores for quality remain ahead of our full choice supermarket competitors and we are the only full choice supermarket to improve on quality perception scores while maintaining price perception scores over a three-year period12
  • We have invested to change the layout of our supermarkets and convenience stores in line with the government’s High in Fat, Salt and Sugar (HFSS) guidance and to enhance our Fresh, Food Service and Grocery sections
  • Through our partnership with Boparan Restaurant Group we have opened two further “The Restaurant Hub” food halls, bringing the total to four and we now have 50 Starbucks cafés in Sainsbury’s supermarkets


  • In September we announced a £25 million package to support colleagues with the cost of living. This included a second pay rise this year for 127,000 hourly-paid colleagues, raising the base rate to £10.25 per hour nationally and £11.30 per hour in London. The package also includes free food during shifts and increased discounts at Sainsbury’s and Argos
  • Investment in colleagues and our stores is supporting strong supermarket customer satisfaction scores. Customer satisfaction stores are ahead of competitors in availability, speed of checkout, quality and colleague availability13
  • We are well positioned to serve our customers wherever and however they want to shop. As customer shopping habits normalise and people return to stores post-pandemic, we are growing overall market share with a higher proportion of online customers switching to our own stores versus competitors14. Supermarket sales grew 3 per cent15
  • Convenience sales are now 7 per cent higher than pre-pandemic, driven by particularly strong growth in less urban convenience stores
  • Our online productivity metrics have improved with item pick rate per hour up 13 per cent versus pre-pandemic and deliveries per hour up 9 per cent
  • By the end of the financial year we plan to have opened around 16 convenience stores, closed three supermarkets and closed eight convenience stores as part of our focus on having stores that are in the best locations for customers
  • We now deliver around 118,000 On Demand grocery orders per week in as little as 30 minutes from nearly 700 stores through our Chop Chop service and partnerships with Deliveroo and Uber Eats

Brands that Deliver
We are strengthening our brands, so that they deliver more consistently both for our customers and for our shareholders. They must contribute positively in their own right and support our ambitions in food. Argos is performing well in a market where customers are looking for reassurance on value and is considerably more profitable than pre-pandemic. Habitat is growing strongly and Tu is holding up well despite pressure on customers’ disposable incomes. Over 10 million customers are now registered with the Nectar app and Sainsbury’s Bank’s performance has been resilient in a toughening environment.


  • After declines in Q1 against a lockdown comparative, Argos sales increased by 1.6 per cent in Q2, helped by significantly improved product availability year-on-year and the impact of good Summer weather on seasonal sales. Sales were particularly strong in consumer electronics and gardening tools, barbecues and outdoor toys
  • Our Argos transformation programme is on track and profitability is significantly higher than pre-pandemic levels. We now have 414 Argos stores inside Sainsbury’s supermarkets, making it easier for customers to shop for general merchandise conveniently. We have opened 11 Local Fulfilment Centres, ensuring we can serve more customers with more products faster


  • We continue to build the Habitat brand, supporting strong sales growth. Our Autumn/Winter campaign focused on Habitat’s breadth of range and value for money and products featured in the campaign are selling well
  • Our Habitat Kids range delivered a particularly strong performance, especially in bedroom furniture and bedding
  • Customer satisfaction scores have improved; value perception is up 2.4 percentage points year-on-year and brand awareness is up 2.8 percentage points10
  • In October we announced a one-year partnership with British designer Sebastian Conran, son of Habitat founder Sir Terence Conran, including new collaborative ranges and a mentoring scheme for Habitat designers and buyers


  • Our clothing business remains strong and structurally more profitable than pre-pandemic, with significantly lower promotional participation. Overall clothing sales were 2.5 per cent higher than H1 19/20 and full price sales grew from 64 per cent to 80 per cent
  • We delivered a record performance in womenswear dress sales, up 40 per cent, and a good performance in Back to School clothing sales
  • Our latest Tu & Me campaign Autumn collection was well received by customers


  • Nectar is the UK’s biggest loyalty programme and over 10 million customers are now registered with the app
  • SmartShop usage continues to increase and helps to drive value for customers by enabling them to track their spend and benefit from My Nectar Prices, which offers personalised discounts where customers can save over £100 a year
  • Nectar is also increasingly popular with Argos customers and is now used in over 30 per cent of Argos sales
  • Nectar360 is now working with more than 700 suppliers and is tracking ahead of its previous target to deliver incremental profits of £60 million to £70 million. We now expect Nectar360 to deliver incremental profits of at least £90 million by March 2026

Financial Services

  • We are making good progress with our plan to strengthen and simplify our Financial Services business and we continue to invest in digitisation
  • Financial Services delivered underlying operating profit of £19 million in the half, in line with last year. Underlying revenues were up 19 per cent, driven by an increase in credit demand and a recovery in ATM and Travel Money commission income. Additional provisioning has been made on the back of the subdued economic environment and as portfolio behaviours normalise post-pandemic, but overall arrears levels remain low
  • In May we re-opened all our Travel Money Bureaux and revenues have recovered well as travel has returned, although revenues remain below pre-pandemic levels. ATM transaction volumes are up over 6 per cent year-on-year
  • We launched our Digital Savings platform, significantly improving the customer experience
  • Sainsbury’s Bank paid its first dividend of £50 million to the Group in H1

Save to Invest
Two years ago we set out to deliver a step change in efficiency by transforming our approach to costs, simplifying our organisation and delivering a structural reduction in our operating cost base. We are pleased with the level of structural cost savings delivered so far and we are in a strong place. The scale of our cost savings delivery is enabling us to make bold investments in our core food business.

  • We expect to deliver over £1.3 billion of cost savings in the three years to FY23/24, doubling the run rate from the three years to FY19/20. Halfway through this programme, we have delivered £730 million of savings. Cost inflation is considerably higher than we had anticipated, but our strong programme of cost savings is helping us to mitigate the impact of inflation and invest in low prices for customers and in colleague pay ahead of key competitors
  • Argos is delivering improved profitability driven by our end-to-end strategic transformation programme. We expect to close around 50 Argos standalone stores and open around 25 Argos stores inside Sainsbury’s this financial year
  • By March 2024, we expect to have around 160 Argos standalone stores, 430-460 Argos stores inside Sainsbury’s supermarkets and 450-500 collection points. We had previously guided to around 100 standalone Argos stores by this date; this change reflects progress in rent negotiations
  • We have opened 11 Local Fulfilment Centres and as a result, our customers are benefitting from improved availability and faster delivery. We are on track to make a total saving of £105 million by the end of March 2024 for the overall Argos transformation programme
  • We continue to review ways to make our stores more efficient, easy and convenient to shop. Introducing more self-service checkouts means our colleagues are able to focus on different tasks and deliver improved service and improves customer satisfaction scores for speed of checkout
  • We continue to improve the profitability of Groceries Online, consistently reducing the cost to serve while delivering an improved customer experience
  • The transformation of our café, bakery and hot food counters is on track to save over £160 million over the three years to FY22/23. We have so far closed 312 food counters and 260 cafés. We have opened two further ‘The Restaurant Hub’ food halls and we now have 50 Starbucks cafés in Sainsbury’s stores. By working with third parties we can deliver for customers and support our own cost saving programme
  • We are making good progress with the integration of Sainsbury’s, Argos and Habitat supply chain and logistics networks, which will save at least £250 million over the programme
  • We have made good progress in reducing overall energy consumption throughout our business which is in turn supporting cost savings. We have reduced electricity consumption (kWh) across Sainsbury’s and Argos by 23 per cent over the last three years, by rolling out LED lighting in 100 per cent of our stores and fitting aerofoil technology in our fridges among other initiatives
  • We believe we are in a good position relative to the industry on our proportion of Net Zero energy sourcing. We have committed to the long-term purchasing of renewable energy from new windfarms which gives us good protection from variable cost inflation

Plan for Better
As a responsible retailer, we want to Help Everyone Eat Better, offering products that help customers reduce their impact on the environment one plate at a time. We are making good progress against our plan to become Net Zero across our own operations by no later than 2035.

Better for You
Healthy and sustainable diets

  • We are committed to keeping prices low on healthy foods; at least 75 per cent of products in our Aldi price-matched promotion are a Healthy or Better For You choice
  • We have reintroduced £2 top-up coupons to buy fruit and vegetables, to accompany the Government-funded NHS Healthy Start scheme every week over the next six months in England. This could help feed more than half a million pregnant women and children in need of support
  • We are inspiring customers to eat well on a budget with the re-launch of ‘Feed your Family for a Fiver’ campaign and by sharing Healthy and Better for You recipes online
  • Interim Results for the 28 weeks ended 17 September 2022

Better for the Planet

  • We have reduced greenhouse gas emissions (GHG) within our own operations by 44.5 per cent year-on-year, mainly driven by our transition to 100 per cent renewable electricity as well as our ongoing GHG emission reduction initiatives
  • Coming together with other retailers, we collectively invested £9 million in the Responsible Commodities Facility (RCF) to provide financial incentives to farmers in Brazil who commit to 100 per cent deforestation and conversion-free (DCF) soy cultivation
  • We launched our new innovation investment programme, in partnership with Williams Advanced Engineering, and are pledging to invest £5 million to help support small businesses pioneering sustainable technologies

Food Waste

  • We have removed ‘best before’ dates from 100 Fresh products and will have removed these dates from a further 130 products by the end of the year
  • We reduced operational food waste across our business by 7 per cent
  • In the year since launching our partnership with Neighbourly, we have distributed over six million meals, supporting an average of 750,000 people each week

Plastic and Recycling

  • We became the first retailer to launch our own refillable handwash pouch, saving 26 tonnes of plastic per year and replaced our double concentrate squash bottles to quadruple concentrate, saving 185 tonnes of plastic each year
  • We launched new double-length toilet rolls, reducing packaging by 30 per cent and saving customers money
  • Since launching our partnership with Newlife in 2019, we have donated 65.5 tonnes of unsellable clothing

Better for Everyone
Human Rights

  • We published our first Human Rights saliency report and set out five Human Rights commitments, based on our most salient human rights risks and emerging issues that affect the people within our supply chain

Diversity and Inclusion

  • We launched the ‘Thrive with Sainsbury’s’ programme, which supports Black founder-led brands to create food and drink products and committed £1 million to help these businesses grow and to mentor participating founders
  • We have made good progress against our Diversity and Inclusion targets and have increased both black and female representation in senior leadership positions year-on-year

Animal Health and Welfare

  • We were awarded ‘UK Retailer of the Year 2022’ by the Aquaculture Stewardship Council (ASC)
  • We are focusing on a refreshed commitment to improve animal health and welfare and practising responsible antibiotic stewardship

1 Nielsen panel, Total Average Selling Price growth YoY, 52 weeks to 17 Sept 2022. Total FMCG exc. Kiosk & Tobacco
2 Nielsen panel volume growth Yo3Y. Total FMCG excl. Kiosk & Tobacco, 28 weeks to 17 Sept 2022. Total Outlets
3 Nielsen panel volume growth YoY. Total FMCG excl. K&T, 12 weeks to 17 Sept 2022. Total universe: Total Outlets
4 Nielsen panel, Total Average Selling Price growth YoY, 52 weeks to 17 Sept 2022. Total FMCG exc. Kiosk & Tobacco
5 Value Reality. H1 Mar-Sept 2022 vs H1 Mar-Sept 2021; Edge by Ascential, internal modelling
6 NielsenIQ panel data. Net volume switching £m to Aldi + Lidl as % of each retailer’s relative volume. 28 weeks to 17 September 2022
7 Nielsen panel, Premium OL market – Total FMCG excl. Kiosk and Tobacco. Volume growth differential for 12 weeks to 17 September 2022. Total universe: total outlets
8 Supermarket CSAT. Competitor Benchmarking. 12 weeks to 17 Sept 2022
9 BRC data, 28 weeks to 17 Sept 2022. Argos differential, Total NFNC (exc. H&B & stationery) sales
10 YouGov Value Perception and Brand Awareness scores for Habitat brand. H1 22/23 average scores vs H1 21/22 average scores
11 Nielsen panel data, Top 100 SKUs by retailer. Average Selling Price YoY growth. 52 weeks to 17 Sept 2022
12 OC&C Proposition Index, Grocery Price vs Quality, August 2022 survey
13 Nielsen panel data. Proportion of H1 22/23 value switching back into own stores. Average of other online players = Tesco, Asda, Morrisons
14 Competitor benchmarking survey. Q2 22/23 supermarket CSAT scores 12 weeks to 17 September 2022
15 Including Argos stores in Sainsbury’s sales