Sainsbury's, the UK's second-largest grocer, announced robust sales growth for the year ended February 28, 2026. Grocery sales increased by 5.2% and total sales excluding fuel grew by 4.9% to £25.9 billion. This strong performance allowed the company to consistently gain market share for the sixth consecutive year, outperforming the market.
Despite this positive sales performance, Sainsbury's issued a cautious outlook for the upcoming financial year, predicting underlying operating profit from retail to fall between £975 million and £1.08 billion. This is lower than the £1.03 billion recorded in the previous year and below analyst consensus. The primary reason cited for this conservative forecast is the "very uncertain" situation in the Middle East, which CEO Simon Roberts stated would impact both customers and the business. The company stressed its commitment to keeping prices low, absorbing some operating cost inflation rather than passing the full extent on to consumers.
The announcement led to a decline in Sainsbury's share price, which fell by 5.4% in morning trading. Analysts noted that while the core grocery business is performing well, the Middle East conflict introduces a new layer of cost-of-living concerns, potentially leading to higher input and running costs for the supermarket. Sainsbury's approach contrasts with rival Tesco, which had previously downplayed the prospect of price rises, making Sainsbury's more direct in its assessment of geopolitical risks.
