Business

Sainsbury's reports 9% rise in half-year profits

Sainsbury's
Image caption Sainsbury's has overtaken Asda and is now the second-largest supermarket chain in the UK

Sainsbury's has reported a half-year pre-tax profit of £433m, up 9.1% from the same period in 2012.

The supermarket giant said the results were "strong" considering the "tough trading environment".

Like-for-like sales, which strip out the impact of new stores, were up 1.4% excluding fuel.

Sainsbury's has now overtaken Asda and moved into the number two spot for the largest supermarket in the UK, second to Tesco.

Shoppers under pressure

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Media captionJustin King: "In terms of sales, we are number one on most measures of service and availability"

Total sales for the 28 weeks to 28 September rose 4.4% to £13.9bn. Online sales were up 15% while sales at its convenience stores rose more than 20%.

Chief executive Justin King said the firm's share of the grocery market was at its highest for a decade, after 35 consecutive quarters of like-for-like sales growth.

But Mr King told the BBC that the retailer still had a long way to go to catch Tesco in terms of sales.

He also said that shoppers' finances remained under pressure.

"Average price rises are still ahead of average wage rises. People at the end of the week, at the end of the month, have less money left. That's the reality we are trading in."

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Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: "Without question, this is a strong performance from a resurgent Sainsbury's."

However, he added that "intense competition, rising commodity prices and the group's sole UK focus limited its scope for further expansion".

In October, Tesco reported a 23.5% drop in profits for the first half of its financial year to £1.39bn, which it said was down to a challenging retail environment, particularly in Europe.

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