UK-based supermarket chain Sainsbury’s posted stronger third-quarter grocery sales and held its full-year profit outlook, despite weaker performance in general merchandise and Argos.
In the 16 weeks to 3 January 2026, total retail sales excluding fuel increased 3.9% year-on-year to £10.02bn ($13.43bn)
Total retail sales, including fuel, climbed to £11.12bn, up from £10.76bn in the same quarter last year.
Grocery sales advanced 5.4% over the period while general merchandise and clothing declined 1.1%.
Its online unit, Argos, reported a 1% drop in sales. The company also noted that volume growth was offset by lower average selling prices, reflecting a highly promotional environment and weaker demand for higher-priced items.
Online grocery sales rose 14% in the quarter while convenience stores delivered a “record” performance. Fresh food sales increased 8%, with Taste the Difference fresh food sales up 15%.
The Tu clothing brand recorded volume growth ahead of the wider clothing market, despite softer overall demand.
Homewares and furnishings brand Habitat posted a 6% sales increase for the quarter while the relaunched Chad Valley range delivered 7% growth.
Over the six-week Christmas trading period to 3 January, total retail sales excluding fuel increased 3.3%, supported by a 5.1% rise in grocery sales.
The retailer said it continues to expect retail underlying operating profit of more than £1bn for the 2025/2026 financial year, citing “strong grocery trading momentum and market share gains”.
Sainsbury’s CEO Simon Roberts said: “We have won grocery market share for the sixth consecutive Christmas period, again delivering our winning combination of value, quality, service and availability for customers. When we strengthened our profit guidance in November, we said we planned to invest in the strength of our competitive position through the most important trading period of the year.”
Sainsbury’s said it remains on track to achieve £1bn of cost savings by March 2027 under its “Next Level” strategy and highlighted ongoing investment in technology, store operations and supply chain efficiency.
The company also raised its guidance for retail free cash flow to more than £550m, up from previous guidance of more than £500m.
The group reiterated its intention to return more than £800m to shareholders during the current financial year through ordinary dividends, a £250m special dividend and a £250m share buyback.
“Sainsbury’s grocery growth offsets weaker merchandise and Argos sales in Q3” was originally created and published by Retail Insight Network, a GlobalData owned brand.
