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Introduction & Market Context
J Sainsbury PLC (LSE:LON:SBRY) presented its Q1 2025/26 trading statement on July 1, 2025, highlighting strong sales growth across its retail segments. The UK’s second-largest supermarket chain reported total retail sales growth of 4.9% excluding fuel, demonstrating continued momentum in a competitive grocery landscape. The company’s performance reflects its strategic focus on value positioning, quality innovation, and digital transformation initiatives.
Quarterly Performance Highlights
Sainsbury’s delivered robust sales growth across all key categories in Q1 2025/26. Grocery sales increased by 5.0%, while General Merchandise & Clothing grew by 4.2%. Argos, the company’s catalog retailer, posted sales growth of 4.4%.
As shown in the following chart of quarterly retail sales growth by category:
Total (EPA:TTEF) retail sales including fuel grew at a more modest 2.4%, impacted by a significant 13.6% decline in fuel sales. This decline in fuel sales reflects broader market trends in fuel consumption and pricing.
The company’s volume performance was particularly impressive, outpacing major competitors in both year-on-year and two-year comparisons. Sainsbury’s achieved 0.9% volume growth year-on-year, ahead of Tesco (OTC:TSCDY)’s 0.7%, while Morrisons and Asda experienced volume declines of 5.2% and 7.8% respectively.
The two-year volume growth comparison further highlights Sainsbury’s market outperformance, with 4.6% growth compared to Tesco’s 2.3%, Morrisons’ -6.9%, and Asda’s -13.5%.
This competitive volume performance is illustrated in the following chart:
Competitive Industry Position
Sainsbury’s has maintained a strong value position in the market, improving its value perception against all competitors year-on-year. The company has expanded its Aldi Price Match program from approximately 650 SKUs in June 2024 to around 800 SKUs in June 2025. Similarly, its Nectar Prices program has grown from approximately 7,500 SKUs to over 9,000 SKUs during the same period.
These value initiatives have contributed to record customer satisfaction scores in the value category, as shown in the following chart:
The company’s premium own-label brand, Taste the Difference (TTD), has shown accelerating growth, with sales increasing by 18% year-on-year in Q1 2025/26, compared to 14% in Q1 2024/25 and 9% in Q1 2022/23. This performance has been supported by the introduction of over 250 new TTD products for the summer season, highlighting Sainsbury’s commitment to quality and innovation.
The growth trajectory of the Taste the Difference range is illustrated here:
Customer satisfaction metrics show Sainsbury’s leading its main competitors, with overall satisfaction scores consistently above Asda and Morrisons, and now exceeding Tesco in Q1 2025/26. The company reported significant improvements in customer satisfaction across its convenience stores and online grocery channels, with convenience stores showing a 3.0 percentage point increase in overall satisfaction and a 7.4 percentage point improvement in value for money perception.
The following chart demonstrates Sainsbury’s leading position in customer satisfaction:
Strategic Initiatives
Sainsbury’s is focusing on several strategic initiatives to drive continued growth. The company is delivering its largest space growth in over a decade while celebrating 25 years of its Taste the Difference premium range. Digital transformation remains a priority, with expanded personalization capabilities and increased store digitization.
A significant upcoming initiative is the launch of Nectar360 Pollen, described as "the most advanced unified retail media platform in the UK." Set to launch in late 2025, this platform aims to revolutionize omnichannel retail media by providing brands and agencies with a comprehensive solution powered by customer insights and AI.
For Argos, the company’s "More Argos, more often" strategy is showing positive results, with improved customer traffic and volume growth. Argos reported 4.4% year-on-year sales growth in Q1 2025/26, supported by increased online traffic and volume growth.
Forward-Looking Statements
Looking ahead, Sainsbury’s expressed confidence in delivering "another strong summer" based on three key pillars: sustaining its strong competitive position, delivering outstanding quality and innovation, and driving the "More Argos, more often" strategy.
The company’s continued focus on balancing value initiatives with premium offerings positions it well in the current market environment. The expansion of both the Aldi Price Match and Nectar Prices programs demonstrates Sainsbury’s commitment to value perception, while the accelerating growth of its Taste the Difference range highlights its strength in the premium segment.
With volume growth outperforming major competitors and stable primary shopper numbers, Sainsbury’s appears well-positioned to maintain its market momentum through the remainder of the financial year, despite ongoing competitive pressures in the UK grocery sector.
Full presentation:
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