J Sainsbury Plc (LON:SBRY) has announced its preliminary results for the 52 weeks ended 1 March 2025
Next Level strategy delivering strong momentum; committed to continued outperformance
Simon Roberts, Chief Executive of J Sainsbury plc, said: “We’ve transformed our business over the past four years. We have created a winning combination of value, quality and service that customers love, investing £1 billion in lowering our prices. More people are choosing Sainsbury’s for their main grocery shop as a result, delivering our highest market share gains in more than a decade. We are committed, above all else, to sustaining the strong competitive position we have built – consistently giving customers the great value they have come to expect from Sainsbury’s – and we expect to continue to outperform the market.
“Our customer offer is the strongest it has ever been. We’ve expanded Aldi Price Match to more products than ever before in addition to offers on more than 9,000 products with Nectar Prices. Customer satisfaction with product availability is at record levels and we’re continuing to add more new, innovative products to our ranges. Nectar is taking our ability to create personalised value and loyalty to the next level and our long-term contracts with farmers and suppliers demonstrate our commitment to resilience and sustainability across the UK food system.
“Our belief in the strength of Sainsbury’s offer has driven our decision to make our largest investment in expanding our store space in over a decade as we open supermarkets in key new locations and extend food space within many of our existing stores. It’s also why we continue to invest in our colleagues, whose dedication will power our Next Level plan. Working together with our suppliers we will continue to deliver for our customers, our shareholders and the communities we serve.”
Financial Highlights
| · | Sainsbury’s FY sales (excluding fuel) £26.6bn, up 4.2%, Argos FY sales £4.9bn, down (2.7)%, Fuel FY sales £4.7bn, down (8.9)% |
| · | Strong year-end sales momentum, with growth in all our brands: Sainsbury’s Q4 sales up 4.1% and Argos Q4 sales up 1.9%, reflecting continued improvement in online traffic trend |
| · | Retail underlying operating profit £1,036m, up 7.2%, with double-digit growth at Sainsbury’s partially offset by lower profits at Argos |
| · | Statutory profit after tax £242m, up 77%. Non-underlying items of £(297)m on a post-tax basis predominantly relate to the restructuring of the Financial Services division and Retail restructuring costs |
| · | Retail free cash flow of £531m, in line with guidance to deliver at least £500m |
| · | £200m share buyback programme complete; full-year dividend of 13.6 pence, up 4% year-on-year |
2025/26 Share Buyback and Special Dividend
| · | Reflecting the strength of our balance sheet, we will buy back at least £200m of shares in 2025/26 and we expect to return bank disposal proceeds of £250m via special dividend in the second half of the year. The special dividend will be accompanied by a proposed share consolidation |
| · | Any distributable bank disposal proceeds in excess of £250m will be used to enhance the share buyback above a core £200m base |
| Financial Summary | 2024/25 | 2023/24 | YoY |
| Business performance | |||
| Retail sales (inc. VAT, excl. fuel) | £31,555m | £30,615m | 3.1% |
| Retail underlying operating profit | £1,036m | £966m | 7.2% |
| Total Financial Services underlying operating profit* | £30m | £29m | 3.4% |
| Underlying profit before tax* | £761m | £701m | 8.6% |
| Total underlying basic earnings per share* | 23.1p | 22.1p | 4.5% |
| Proposed full-year dividend per share | 13.6p | 13.1p | 3.8% |
| Net debt (inc. lease liabilities) | £(5,758)m | £(5,554)m | £(204)m |
| Non-lease net debt | £(264)m | £(200)m | £(64)m |
| Return on capital employed* | 9.0% | 8.3% | 70bps |
| Statutory performance | |||
| Group revenue (excl. VAT, inc. fuel) | £32,812m | £32,238m | 1.8% |
| Profit after tax | £242m | £137m | 76.6% |
| o/w Continuing operations | £420m | £308m | 36.4% |
| o/w Discontinued operations | £(178)m | £(171)m | (4.1)% |
| Total basic earnings per share* | 10.4p | 5.9p | 76.3% |
| Net cash generated from operating activities (continuing) | £1,364m | £2,113m | £(749)m |
*On a total basis inclusive of discontinued operations
2025/26 Outlook
| · | We have made four years of exceptional progress and investment, resetting our value proposition and strengthening the fundamentals of our business. This puts us in a strong competitive position and we are committed to sustaining this in the year ahead. We expect to continue to grow grocery volumes ahead of the market and we have started the year with good trading momentum across all our brands. We expect to deliver Retail underlying operating profit of around £1 billion and Retail free cash flow of more than £500 million |
| · | Profit delivery will be supported by continued growth in Nectar profit contribution and industry-leading cost saving delivery and will be weighted more towards the second half versus last year, reflecting the timing of benefits from space reallocation activity and new store openings |
Building on strong foundations
The first year of our Next Level Sainsbury’s strategy has built on the success of our Food First strategy, delivering further grocery market share gains1 and significant operating leverage. This reflects the investments we have made over the last four years to improve our grocery proposition. We have built resilience and sustainable competitive advantage through strengthening the fundamentals of the business across logistics, technology and the way we work with suppliers.
As a consequence, we are winning more big basket primary customers2, providing us with the confidence to accelerate our plans to bring more of the Sainsbury’s food range to more customers. We have acquired 14 new supermarket sites in key target locations. Together with further new supermarket openings and expanding food space in our supermarkets through space reallocation, this provides a unique opportunity to drive further market share gains.
The strength of our balance sheet and cash generation are key strategic assets, allowing us to invest capital to remain competitive, drive growth and efficiency and build competitive advantage while also delivering strong returns to shareholders. During the year we invested £825 million of capital in the business and have returned more than £500 million of our £531 million Retail free cash flow to shareholders, completing our share buyback programme of £200 million and paying ordinary dividends of £308 million. The strength of our balance sheet was recognised by S&P and Moody’s giving public investment grade ratings in January 2025 and we issued £550 million of unsecured fixed income bonds, our first unsecured bond issue in 21 years.
We have further sharpened our focus on our core grocery business over the last year, through the announcements of the sale of Sainsbury’s Bank’s core banking and ATM businesses and the sale of the Argos Financial Services cards portfolio.
As we announced in January, we have made changes within our Operating Board to recognise the different needs of the Sainsbury’s and Argos businesses and have reorganised our store support centre teams to reflect the distinction between the two. Rhian Bartlett, Chief Commercial Officer for Sainsbury’s, now leads our commercial proposition across grocery, Sainsbury’s general merchandise and clothing. To ensure a clear focus on delivering our More Argos, more often plan, Graham Biggart has taken on the role of Managing Director for Argos. These changes are driving faster decision making and improved performance for both Sainsbury’s and Argos.
Across the business, we are focused on delivering on the eight commitments that we made in February 2024:
| · Food volume growth ahead of the market | · Deliver profit leverage from sales growth |
| · Customer satisfaction higher 26/27 vs 23/24 | · £1bn of cost savings over three years to 26/27 |
| · Colleague engagement higher 26/27 vs 23/24 | · £1.6bn+ Retail free cash flow over three years to 26/27 |
| · Deliver our Plan for Better commitments | · Higher return on capital employed |
Our progress against these commitments will be driven by our four strategic outcomes: First choice for food, Loyalty everyone loves, More Argos, more often and Save and invest to win.
First choice for food
We have delivered a record-breaking year in grocery, outperforming the market every quarter for a second consecutive year3 and making our biggest market share gains in more than a decade4 as more customers come to Sainsbury’s for their big trolley shop5. Our winning combination of outstanding quality, great value and leading service really resonates with customers, driving a significant increase in loyalty, with primary customer numbers 18 per cent higher than four years ago2. We have consistently grown volumes across supermarkets, convenience stores and online grocery, as we show up for customers however they want to shop, with great availability and inspiring product innovation across the full basket.
With these strong foundations and our leading customer proposition now firmly re-established, we are moving forward with confidence, delivering more of our food range to more customers through allocating more space to food in our existing stores, as well as our biggest growth in new supermarket space in over a decade. We expect this to contribute to sustained volume outperformance versus the market while we will also further enhance our customer proposition and grow our personalisation capabilities.
More customers are shopping with us for their big trolley shops as we consistently deliver our winning combination
| · | We are building stronger customer loyalty and successfully converting Secondary to Primary customers6 who really trust Sainsbury’s as their first choice for their big trolley shop, driving the biggest share gains in the market for the main shop mission7 |
| · | Our commitment to consistently delivering great value across the basket has driven a sustained improvement in our competitive value position8 and a significant improvement in customers’ perception of the value we offer9. We continue to prioritise price investment in the items that matter most to customers and were the first retailer to have extended our Aldi Price Match campaign across supermarkets, convenience stores and online. We have rolled out our Nectar Prices offer to over 9,000 products and we are enhancing our capabilities in personalised value through Your Nectar Prices, delivering uniquely-targeted discounts on the products customers buy most often |
| · | We continue to work closely with our suppliers to develop innovative and high-quality products. We launched more than 1,300 new products over the course of the year, of which more than 600 were Taste the Difference. Taste the Difference sales grew 15 per cent, with a particularly strong performance in Fresh categories |
| · | Customers trust us to deliver outstanding quality at affordable prices as they are dining-in more at home and trading up to Taste the Difference more often, with one in three baskets now including a Taste the Difference product10. We continue to outperform the market at every key event11 and Taste the Difference remains the fastest growing premium own label in the market12. In the year ahead we will celebrate Taste the Difference’s 25th birthday, coinciding with our ambition to achieve more than £2 billion of sales in our biggest and best year for Taste the Difference yet |
| · | Through strengthening our relationships with suppliers and migrating our food products to a machine learning forecasting platform, we have delivered significant improvements in availability, growing food availability levels by 190 basis points over the last four years. As a result, we have achieved the biggest improvement in customer satisfaction for availability of all major competitors over the same time period13 |
| · | We continue to deliver outstanding customer service, with our overall satisfaction scores consistently ahead of the other full-choice grocers14. We believe that happy, well engaged colleagues deliver great customer service and in January we announced our investment in an above inflation pay award for our colleagues, leading the industry for the third year in a row. Over the last three years, we’ve invested half a billion pounds in increased colleague pay and benefits |
Growing food space to bring more of our range to more customers, with bold acceleration in our space growth ambitions for 2025/26
| · | We are building on the strength of our grocery performance and our winning combination of quality, value and service to bring more Sainsbury’s food to more customers in more locations and improving ranges, customer experience and the efficiency of many of our existing stores |
| · | During the year we acquired 14 new supermarket sites in key target locations from Homebase and Co-op, the majority of which we expect to convert and open in 2025/26. Combined with our organic store opening programme, we expect to open a total of 15 supermarkets during 2025/26 and over the next two years our new supermarket openings will add over 400,000 sq ft of new space, our most significant investment in new supermarket space for many years. We also expect to add another 25 new convenience stores in each of the next two years. This will bring over 700,000 more people within a ten-minute drive of a Sainsbury’s store |
| · | We are making good progress with our three-year ‘More for More’ plan, investing in our supermarkets to make more of our food range available to more customers by rebalancing space, adding around 90,000 sq ft of food space in 2024/25, weighted to the second half. We are planning to add another 90,000 sq ft of food space in 2025/26. We are seeing positive early results in invested stores with benefits expected to build through the second half of 2025/26 and beyond as we annualise periods of disruption, learning as we go to ensure we optimise our stores for customer experience, trading intensity and ROCE. We are making more of our range and proposition accessible to more customers, enabling simpler shopping missions with better digital capabilities across our supermarkets |
| · | In January, we announced a number of propositional changes to food services in our stores in order to drive growth and availability at a reduced cost to serve, allowing us to create further space to offer more fresh food ranges. By early Summer we will have closed patisserie, hot food and pizza counters and are making the most popular items available in aisles. We have now closed all remaining Sainsbury’s Cafés and we are converting our scratch bakeries to bake-off, driving improvements in quality, value and availability throughout the day. From the Autumn, we will create new On the Go hubs with flexiserve hot food offerings, delivering an improved customer experience |
| · | Taking all of these elements of space growth: new stores, rebalancing existing store space and propositional resets, we expect to grow total food space in Sainsbury’s by nearly three per cent in 2025/26 |
Delivering for customers online and in our convenience stores
| · | We have transformed our convenience stores during the year by reconfiguring space and optimising range across our entire Convenience estate, bringing more products to customers and delivering a simpler, faster shopping experience. This has helped to drive convenience sales growth of nearly four per cent in 2024/25 and market share growth of 20 basis points15. We also launched Aldi Price Match in our convenience stores in November and were the first grocer to do so, resulting in a rapid and significant improvement in value for money customer satisfaction scores16 |
| · | We are investing in developing new format stores to better serve specific customer missions, opening our first airport store, at Edinburgh airport, and four new format stores in recent months. Features in these latest stores include a higher proportion of chilled food space, digital screens and increased security features |
| · | Groceries Online sales increased seven per cent year on year. More customers are doing their online grocery shopping with us and are benefiting from the investments we have made in improving the digital customer journey, including better showcasing our product ranges and improving the relevance of suggested basket additions. This has been a key driver of increased basket size, greater frequency of visits and improved customer satisfaction. Groceries Online delivered the highest customer satisfaction growth of all channels, with customers particularly recognising our improved availability as well as appealing promotions through personalised Your Nectar Prices17 |
| · | Growth in our OnDemand rapid delivery channel remains very strong, with sales growth of around 80 per cent in the year. We have strengthened our long-term partnerships with external providers and have now successfully rolled out the offer to over 1,200 locations. We are now able to serve more than 65 per cent of the population via this channel, a significant increase year on year |
| · | We have a strong track record in reducing cost to serve in our online operations. Together with an increasing contribution from our fast-growing and profitable OnDemand sales, this is driving continued profit growth. In the year ahead we will be making meaningful changes to our Groceries Online app, helping us to continue to improve the way in which our customers can shop with us online |
Playing a leading role in creating a more sustainable food system
| · | We’re creating a new culture of collaboration and long-term partnership with our suppliers to deliver shared value and build resilient supply chains, which will enable us to offer good food to our customers now and in the future. Last month we announced a ten-year partnership with Cranswick to set new standards in pig welfare and to provide more stability for the 170 farmers in the Sainsbury’s Pork Producer Group as they invest in farms, factories and processes to build resilience for the future. Together we plan to invest more than £60 million to implement these new higher standards. We also aim to offer Taste the Difference pork that meets net zero criteria by 2029 and by Sainsbury’s fresh pork by 2030 – all whilst protecting value for our customers. This year we also launched the Sainsbury’s Egg Group in collaboration with our egg farmers and became the first retailer globally to invest in Vet Vision AI technology to measure and enhance animal welfare on dairy farms |
| · | To support and inspire our customers to make healthier choices, we launched our Healthy Choice logo on own brand products. We continue to work to make healthier choices more affordable, with more than 75 per cent of products in Aldi Price Match a Healthy or Better For You choice. Alongside this, we launched our Good to Know campaign, to help our customers to navigate towards more sustainable choices, highlighting the ways in which we are contributing to a more sustainable future |
| · | For the second year running we were awarded both the Marine Stewardship Council UK Supermarket of the Year and Aquaculture Stewardship Council UK Retailer of the Year. We also delivered leading packaging innovations moving to vacuum pack all lamb mince and introducing pulp trays for fresh salmon and trout, along with cardboard packaging for our fresh breaded chicken and fish products |
| · | We continue to help provide good food for all, raising c.£34 million for good causes this year and redistributing more than 18 million meals to communities, increasing the amount of surplus food redistributed by more than 30 per cent through our partnerships with Neighbourly and Olio, which we have now rolled out across all stores |
Improving performance in the products and services that sit alongside our food offer
| · | Sainsbury’s general merchandise and clothing delivered higher profits on sales which were in line with the prior year. Margins gained from the mix benefit of stronger clothing sales and lower household electrical and toys sales as we continue to focus ranges and reduce space allocation in some categories | |
| o | Clothing sales grew 2.9 per cent, with particularly strong growth of 12.3 per cent in Q4. Higher full price sales participation delivered a four per cent improvement in profitability during the year, alongside market share gains18. Our renewed focus on design and range in Womenswear resulted in particularly strong sales growth of nearly five per cent and an improvement in customer perception of our ranges. The actions we have taken to improve our availability and expand our basics range delivered growth in essentials sales of nearly four per cent | |
| o | Sainsbury’s general merchandise sales were down 2.8 per cent, driven by space reductions as we’ve implemented space reallocations into food, and softer demand for categories such as household electricals and toys. Poor weather impacted seasonal sales in H1, but overall sales performance improved through the second half. We delivered a particularly good performance in our home accessories and fragrance categories and we continue to make strong progress in repositioning the Habitat brand, with a strong sales response to our design-led collaborations | |
| · | Smart Charge, our ultra-rapid electric vehicle (EV) charging network, is now established in over 75 supermarket locations with more than 600 ultra-rapid EV charging bays. The sites are maturing rapidly, delivering double-digit revenue growth month-on-month. Twenty-five per cent of all electric vehicles entering our Smart Charge Sainsbury’s car parks now charge with us, up from fifteen per cent at launch. We invested £25 million in Smart Charge rollout in 2024/25, in line with guidance. Looking ahead, we are focused on building revenue in our top supermarkets | |
Loyalty everyone loves
Customers love our personalised and rewarding Nectar loyalty scheme. Nectar Prices have transformed the way that customers experience value at Sainsbury’s, with the purple of Nectar now synonymous with value. As value perception has improved19, we have grown the size of our loyal, primary customer base and this in turn benefits our Nectar360 Retail Media offering.
Fuelled by our connection to customers, Nectar360 continues to deliver profitable growth and improved client satisfaction. We are expanding the Nectar coalition, delivering leading data and insights to brands and agencies that work with us and investing to scale our Digital Retail Media offer. In the year ahead, we will further expand our personalisation capabilities in loyalty and we are making high returning investments to accelerate the growth of Nectar360 – further digitising our stores through our connected digital screen network and launching a new industry-leading platform to better connect clients to our full suite of retail media and measurement services.
Growing customer loyalty through the ‘power of purple’
| · | Nectar Prices remain a key driver of our improved value perception9, with £2 billion of savings delivered to customers over the course of this year. We have now expanded our Nectar Prices offers to more than 9,000 products and more and more customers are using Nectar when they shop with us, with participation now more than 85 per cent and reaching our highest ever levels during the Christmas period20. We’re going further to showcase Nectar Prices in store and within our store investment programme we are rolling out more Nectar branding, particularly in the centre aisle, as well as offering greater opportunities for brands to connect directly with customers through displays and digitised in-store media |
| · | More than one million customers are accessing personalised savings each week through Your Nectar Prices, which is available on SmartShop and Online, delivering savings of more than £60 million to customers in the last year. Having built unique capability in this space, we will further enhance the strength of our value offer as we work towards generating up to 500 million personalised offers a week |
| · | We are focused on driving greater engagement with the Nectar app and have achieved a 60 per cent increase in app users over the last two years21 by enhancing digital integration and improving user experience. We are successfully introducing more gamification to the app and reached our highest ever engagement levels in our Count up to Christmas rewards campaign this year, with over one million customers participating |
Investing to accelerate growth in Nectar360
| · | We are ahead of our plan to deliver at least £100 million incremental profit from Nectar360 over the three years to March 2027, delivering an increase of £39 million in the first year of our plan |
| · | Over 900 clients and media agencies now partner with Nectar360 to get the best return on their advertising spend, recognising the benefits of our enhanced retail media capabilities, leading data and insights and our commitment to exemplary client service, with overall client satisfaction improving 4 percentage points year-on-year |
| · | We are accelerating our ambition to create a scaled and connected digital screen network in our stores. With 820 screens (in partnership with Clear Channel) now installed, we are realising the benefits of being able to connect with our customers digitally on the shop floor. We are diverting capital towards this high returning investment, committing to a further 1,600 screens to be rolled out over 2025/26 and into early 2026/27 with a cash payback on investment of less than two years. This will enable brands to communicate directly with customers through more than 2,500 connected digital screens in the future |
| · | The Nectar coalition continues to grow and we achieved a 97 per cent Nectar partner satisfaction score. We announced exciting new partnerships in Marriott Bonvoy, Severn Trent Water and Smart Charge and extended our partnership with British Airways, with further new partnerships in discussion for the year ahead. Alongside this, our marketing affiliate programme (Nectar eShops) has grown to 800 merchants this year, doubling the number of brands available for customers over the last 18 months and extending the offers they are able to access through the programme |
More Argos, more often
Following a slow start to the financial year and a significant reduction in online traffic, Argos sales were behind our expectations in the first half of the year, particularly in the first quarter and early weeks of the second quarter. Sales strengthened into the second half as we took action to improve online customer traffic and volume and we returned to sales growth in the fourth quarter. Profits declined year on year in both H1 and H2, with actions taken during the year improving the trend in the second half.
Within a general merchandise market that remains highly competitive, our focus is on increasing customers’ consideration of Argos – encouraging them to shop with us more often and with bigger baskets. To this end, we are driving change in our digital and commercial proposition, and we have made some good progress strengthening the Argos offer. We have also continued to reduce the complexity of the Argos operating model whilst still providing market-leading convenience for customers.
Focused on extending range, increasing desirability and enhancing digital capabilities
| · | We have reset our approach to trading events to deliver more impactful and focused value activity. We ran five of our new Big Red events during the year, delivering strong improvements in customer satisfaction scores for promotions and value22 and driving an increase in awareness of the premium brands available at Argos |
| · | We continue to strengthen our partnerships with key supply partners, growing our share at key launch moments of the must-have new products from global brands, particularly across Gaming and Toys. Our partnership with Lego has expanded over the course of the year and for the first time this Christmas we partnered to run gamified engagement activity online for the 12 days of Christmas, attracting over 100,000 new customers to Argos |
| · | We have taken action to improve our own labels in addition to the work over recent years on Habitat. We will focus on five primary owned brands (Habitat, Chad Valley, Bush, Home and McGregor), versus 11 previously. This year will see the range relaunch of McGregor in Garden & DIY and Chad Valley in Toys |
| · | Through our Supplier Direct Fulfilment (SDF) model we have introduced more than 4,000 new products this year across 150 categories. This is a 43 per cent increase year-on-year, with a total of 13,500 SDF products now available. In the year ahead we plan to go further to extend the breadth of our range, with plans to add an additional 10,000 SDF products in key categories such as Household Electronics, Furniture, Computing and Gifting |
| · | Our digital capabilities have strengthened through the year, driving more traffic to our site as we deliver a seamless online experience for customers with greater personalisation and improved complementary product recommendations. As a result, more customers are shopping with us online and more customers are making a recommended “attachment” purchase in the same transaction, driving an increase in items per basket. We will also be modernising the credit offer available on our website and are working closely on a new Argos Pay proposition with NewDay, following its acquisition of the Argos Financial Services cards portfolio. This will launch in early 2026 |
Improving operational efficiency and customer experience
| · | We continue to enhance our operating model, including rightsizing standalone stores to improve operational efficiency and customer experience |
| · | We are rolling out more digital collection points and investing in technology across our convenience estate to make collections faster and easier. We are improving the Argos app, increasing personalisation and access to promotional activity and simplifying the collection experience available to app users |
| · | We have made a significant improvement to our stock management processes over the year to deliver smarter, simpler stock flow, optimising working capital and availability across our network. With a 12 per cent reduction in Argos’ net stockholding year-on-year, we are more able to actively manage clearance activity to prevent accumulation of stock. We have also implemented improved stock management processes and are using data driven insights to improve forecast accuracy on buying and ranging |
Save and invest to win
We are making strong progress towards the ambition we laid out in February 2024 and we are confident in our plans to deliver £1 billion of cost savings by March 2027. We achieved savings of around £350 million in 2024/25, bringing total savings over the last four years to over £1.6 billion and are well underway with a programme of high-returning activity that is already delivering savings benefits as well as driving growth and improvements in customer proposition. In addition, our capital investments in efficiency, particularly in technology, will deliver cross-functional savings benefits over the longer-term, giving us clear line of sight to achieving our target.
High returning investments in technology and automation driving efficiencies
| · | We are nearing completion of our three-year future front-end programme, optimising checkouts in all our supermarkets and delivering savings of around £70 million over the programme. On average, self-service participation has increased to over 70 per cent of transactions compared to around 40 per cent of transactions five years ago. While we have achieved a step up in supermarket volumes, front-end labour costs have reduced, driven by a nine per cent improvement in front-end productivity year-on-year |
| · | We are making good early progress with the next phase of our front-end transformation, aiming to drive growth in SmartShop participation for big basket shops. We are currently in the trial phase of enabling customers to pay for their shopping on a SmartShop handset, delivering flexibility and speed for customers whilst reducing the physical infrastructure required. Work is also underway to improve the functionality of SmartShop handsets by digitising the in-store customer journey, for example enabling product finding and personalisation of offers |
| · | As part of our longer-term investments in technology and automation, we are making strong progress in simplifying our general merchandise logistics network, driving improvements in product availability and efficiency. This will result in a transition from five depots to three network distribution centres, delivering savings of £70 million per year once fully implemented, with benefits starting to be realised in 2025/26 |
| · | We are rolling out video analytics technology in stores to protect colleagues and reduce costs, whilst minimising the impact on customer experience. The technology, which aims to reduce mis-scanned items at self-service checkouts, has been deployed in 150 stores to date and we expect to roll out to a further 250 stores over the next financial year. Other protection technology being implemented includes weigh-scale smart-shelves that alert colleagues to bulk product removal and mirror monitors in areas with high risk of loss |
| · | Our five-year strategic partnership with Microsoft utilising AI and machine learning capabilities is already delivering good results. Key focus areas include providing store colleagues with real-time data and insights to focus in-store processes and using machine learning capabilities to improve efficiencies |
| · | Reflecting our commitment to invest in sustainable technologies, we are now buying 100 per cent of the energy generated from eight wind farms across the UK. Wind energy makes up over 30 per cent of our electricity sourcing, with the remainder from other 100 per cent renewable sources |
Delivering productivity benefits through end-to-end programmes
| · | In January, we announced a number of propositional changes in our supermarkets in order to drive growth and availability at a reduced cost to serve, including closing all remaining Sainsbury’s Cafés, hot food, pizza and patisserie counters and converting scratch bakeries to bake-off. These changes are driving cross-functional benefits, increasing our fresh food selling space, improving customer proposition and product quality alongside delivering cost savings |
| · | We also announced changes to management structures in our store support centres, reducing the number of senior management roles by about 20 per cent in a number of areas to drive faster decision making and execution whilst reducing costs |
| · | We have completed the main phase of migration of our food products to machine learning forecasting and are entering our second year of using the platform. We have delivered higher sales as a result of increased availability, improved waste metrics and higher forecasting accuracy leading to better working capital management |
Financial Services
| · | Financial Services operating profit grew by 3.4 per cent in the year, driven by lower expenses as a result of a prior year fixed asset write-off and significant actions taken by management to reduce operational costs, partially offset by lower income from the decision to exit core Banking and higher funding costs. We have made good progress over the year in implementing our plan for a phased withdrawal from core Banking services, announcing in June 2024 the sale of Sainsbury’s Bank personal loan, credit card and retail deposit portfolios to NatWest Group. We now expect this transaction to complete in May 2025 |
| · | In September 2024 we announced the sale of the Sainsbury’s Bank ATM business, comprising around 1,370 cash machines, to NoteMachine to provide end-to-end ATM managed services. The deal provides a shared commission income stream |
| · | In October 2024 we announced the sale of the Argos Financial Services (AFS) cards portfolio to NewDay Group. NewDay acquired beneficial title to the AFS portfolio in February 2025. The AFS cards support around 20 per cent of Argos sales and are held by around two million Argos customers. We additionally announced that we will be partnering with NewDay to create a new Argos-branded digital credit proposition. This will, in time, replace the current Argos credit card propositions with a wider choice of modern, flexible and more convenient ways to manage the cost of purchases |
| · | Following these transactions, we will continue to benefit from financial services income streams which have a stronger connection to our retail offer, including commission income from insurance, travel money and ATMs. We expect the combination of commission income from insurance, travel money and ATMs, alongside income from the NewDay partnership, to deliver sustainable annual profit from financial services of at least £40 million in the financial year to February 2028 |
| · | In 2025/26 we expect to deliver Financial Services underlying operating profit of around £10 million on a continuing basis |
| · | We expect to return bank disposal proceeds of £250 million via special dividend in the second half of the year, subject to regulatory approval. The special dividend will be accompanied by a proposed share consolidation. Any distributable bank disposal proceeds in excess of £250 million will be used to enhance the share buyback above a core £200 million base |
| Like-for-like sales performance | 2023/24 | 2024/25 | |||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | FY | |||||||
| Like-for-like sales (exc. fuel) | 9.8% | 6.6% | 7.4% | 4.8% | 2.7% | 4.2% | 2.8% | 3.7% | 3.2% | ||||||
| Like-for-like sales (inc. fuel) | 3.9% | 2.2% | 5.3% | 2.9% | 2.4% | 1.9% | 0.0% | 2.2% | 1.5% | ||||||
| Total sales performance | 2023/24 | 2024/25 | |||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | FY | |||||||
| Sainsbury’s | 9.9% | 7.5% | 8.4% | 6.5% | 4.2% | 5.1% | 3.7% | 4.1% | 4.2% | ||||||
| Grocery | 11.0% | 8.9% | 9.3% | 7.3% | 4.8% | 5.3% | 4.1% | 3.9% | 4.5% | ||||||
| GM (Sainsbury’s) & Clothing | (2.5)% | (8.7)% | (0.3)% | (5.5)% | (4.3)% | 2.2% | (0.1)% | 6.5% | 0.0% | ||||||
| Argos | 5.1% | (2.6)% | (0.9)% | (6.6)% | (7.7)% | (1.4)% | (1.4)% | 1.9% | (2.7)% | ||||||
| Total Retail (exc. fuel) | 9.2% | 5.8% | 6.5% | 4.3% | 2.3% | 4.1% | 2.7% | 3.8% | 3.1% | ||||||
| Fuel | (21.4)% | (17.1)% | (7.2)% | (7.8)% | 0.4% | (10.6)% | (17.4)% | (6.8)% | (8.9)% | ||||||
| Total Retail (inc. fuel) | 3.3% | 1.5% | 4.4% | 2.4% | 2.1% | 1.9% | 0.0% | 2.2% | 1.4% | ||||||
| Total sales performance (£m) | 2023/24 | 2024/25 | |||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | FY | |||||||
| Sainsbury’s | 7,707 | 5,650 | 8,395 | 3,809 | 8,029 | 5,940 | 8,706 | 3,964 | 26,639 | ||||||
| Grocery | 7,177 | 5,263 | 7,676 | 3,583 | 7,521 | 5,544 | 7,988 | 3,724 | 24,777 | ||||||
| GM (Sainsbury’s) & Clothing | 530 | 387 | 719 | 226 | 508 | 396 | 718 | 240 | 1,862 | ||||||
| Argos | 1,400 | 1,047 | 1,960 | 647 | 1,292 | 1,033 | 1,933 | 658 | 4,916 | ||||||
| Total Retail (exc. fuel) | 9,107 | 6,697 | 10,355 | 4,456 | 9,321 | 6,973 | 10,639 | 4,622 | 31,555 | ||||||
| Fuel | 1,543 | 1,200 | 1,624 | 739 | 1,549 | 1,073 | 1,341 | 690 | 4,653 | ||||||
| Total Retail (inc. fuel) | 10,650 | 7,897 | 11,979 | 5,195 | 10,870 | 8,046 | 11,980 | 5,312 | 36,208 | ||||||
| Total sales performance –previously reported categorisation | 2023/24 | 2024/25 | |||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | FY | |
| Total General Merchandise: | 4.0% | (2.6)% | (0.6)% | (5.6)% | (7.3)% | (1.7)% | (1.5)% | 1.9% | (2.7)% |
| GM (Sainsbury’s) | (1.2)% | (2.7)% | 0.9% | 0.4% | (5.3)% | (3.3)% | (2.3)% | 1.7% | (2.8)% |
| GM (Argos) | 5.1% | (2.6)% | (0.9)% | (6.6)% | (7.7)% | (1.4)% | (1.4)% | 1.9% | (2.7)% |
| Clothing | (3.7)% | (14.6)% | (1.7)% | (11.7)% | (3.3)% | 8.3% | 2.2% | 12.3% | 2.9% |
Notes
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 9:15 (BST). This will be available to view on our website at the following link: https://sainsburys-preliminary-results-2024-25.open-exchange.net/
A recorded copy of the webcast and Q&A call, alongside slides and a transcript of the presentation will be available at www.about.sainsburys.co.uk/investors/results-reports-and-presentations following the event.
J Sainsbury’s will issue its 2025/26 First Quarter Trading Statement at 07:00 (BST) on 1 July 2025.
