REG - Sainsbury(J) PLC - Half-Year Report
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RNS Number : 3921G Sainsbury(J) PLC 06 November 2025
6 November 2025
J Sainsbury plc
Interim Results for the 28 weeks ended 13 September 2025
Winning combination of value, quality and service driving continued market
share gains
Simon Roberts, Chief Executive of J Sainsbury plc, said: "We started this
year with one clear priority - to sustain the strong competitive position we
have built over the last five years. We have delivered on this in the first
half, with focused and effective investment to ease cost-of-living pressures,
keeping price inflation behind the wider market and delivering our winning
combination of great value, trusted quality and leading service. This has
driven continued grocery volume growth ahead of the market for a fifth
consecutive year and a profit performance ahead of our expectations.
"We planned for a strong Summer and we really delivered, with leading product
innovation, and outstanding fresh food availability when demand was highest
throughout the hot weather. At Argos we delivered a good seasonal performance,
grew market share and improved profitability. A huge thank you to all our
hard working and dedicated colleagues, suppliers and farmers who make this
possible every day.
"We're investing where it matters most with Aldi Price Match on everyday
essentials and bringing personalised Your Nectar Prices to all supermarket
customers. Customers saved an average of £14 on an £80+ big weekly shop with
Nectar Prices. Value perception is improving across supermarkets, convenience
stores and online. We've continued to invest in innovation too, including
launching our new Taste the Difference Discovery ranges for restaurant quality
food at home. In its 25(th) year, more and more customers are shopping Taste
the Difference, driving the biggest premium own-label share gains in the
market.
"Our offer has never been stronger. So while we expect the market to remain
highly competitive, our momentum gives us real confidence as we head into
Christmas and we have strengthened our profit guidance today."
Financial Highlights
· Sainsbury's sales (excluding fuel) up 5.2%, with Grocery sales growth of 5.3%
and Sainsbury's General Merchandise & Clothing sales up 3.3%. Argos sales
up 2.3%, Fuel sales down 11.3%
· Retail underlying operating profit £504m, ahead of our expectations and in
line with last year, with strong trading and cost savings delivery enabling
focused investments in value, customer service and quality and offsetting
higher employment and regulatory costs and disruption from space reallocation
activity
· Statutory profit after tax £165m (HY 2024/25: £76m). Non-underlying items of
£(72)m on a post-tax basis predominantly relate to Retail restructuring costs
and the phased withdrawal from Financial Services
· Retail free cash flow £310m. On track to exceed £500m for the full year
· Bank disposal proceeds will now exceed £400m, higher than originally
expected. £400m will be returned to shareholders via a £250m special
dividend and £150m incremental share buyback. Of the £150m, £50m will be
added to the previously announced £200m buyback in financial year 2025/26 and
the remaining £100m will be added to the core buyback in financial year
2026/27
· Interim dividend of 4.1 pence per share, up 5%
· Total cash returns to shareholders in financial year 2025/26 now expected to
exceed £800m
H1 Financial Summary 2025/26 2024/25 YoY
Business performance
Retail sales (excl. VAT, excl. fuel) £15,577m £14,865m 4.8%
Retail underlying operating profit £504m £503m 0.2%
Financial services underlying operating profit/(loss)(1) £2m £(29)m -
Underlying profit before tax(1) £340m £309m 10%
Underlying basic earnings per share(1) 10.3p 9.2p 12%
Interim dividend per share 4.1p 3.9p 5.1%
Retail free cash flow £310m £425m £(115)m
Net debt (inc. lease liabilities)(2) £(5,527)m £(5,584)m £57m
Non-lease net debt(2) £(81)m £(152)m £71m
Return on capital employed(3) 9.0% 8.5% 50bps
Statutory performance
Group revenue (excl. VAT, inc. fuel) (4) £17,581m £17,107m 2.8%
Profit after tax £165m £76m 117%
o/w Continuing operations(4) £185m £175m 5.7%
o/w Discontinued operations(4) £(20)m £(99)m 80%
Total basic earnings per share 7.2p 3.2p 125%
Net cash generated from operating activities - continuing(4) £265m £577m (54)%
2025/26 Outlook
Our focused and effective investment in value, quality and service in the
first half further strengthened our customer proposition relative to
competitors and helped deliver a sales and profit performance ahead of our
expectations. This means that, while we will continue to make balanced choices
to invest and sustain the strength of our competitive position through the
most important trading period of the year, we now expect Retail underlying
operating profit of more than £1 billion. We continue to expect to deliver
Retail free cash flow of more than £500 million.
Enhanced cash returns: Special dividend, Ordinary dividend and Share buyback
We now expect net cash proceeds from the disposal of our banking operations to
exceed £400 million, reflecting very good progress with our phased withdrawal
from core Banking products. As previously announced, we will return £250
million of these proceeds to shareholders via a special dividend of 11.0 pence
per share. This will be paid on 19 December 2025 to shareholders on the
Register of Members at the close of business on 14 November 2025. We are no
longer proposing a share consolidation alongside payment of the special
dividend.
We will additionally return £150 million of bank disposal proceeds through
share buybacks, with £50 million to be added to the core £200 million
buyback in financial year 2025/26 and £100 million to be added to the core
buyback in financial year 2026/27.
We announced in April 2025 that we would buy back £200 million of shares in
the financial year 2025/26. We bought back c.57 million shares with an
aggregate purchase price of £158 million in the period between 22 April 2025
and 12 September 2025. We will complete the remaining £42 million of this
programme by the end of the 2025/26 financial year as well as the additional
£50 million announced today.
The Board has recommended an increased interim dividend of 4.1 pence per share
(HY 2024/25: 3.9 pence). Consistent with prior years, this represents 30 per
cent of the prior year's full year dividend per share. This will be paid on 19
December 2025 to shareholders on the Register of Members at the close of
business on 14 November 2025.
Balanced choices delivering strong momentum
Halfway through the three-year plan that we set out in February 2024, we are
making good progress against our commitments, further strengthening our
customer proposition relative to competitors whilst navigating high levels of
operating cost inflation. This is delivering continued strong momentum as more
and more customers are trusting us to consistently deliver great value
alongside the outstanding quality and service they have always expected from
Sainsbury's.
We continue to strengthen our capabilities, having made key appointments
across retail, clothing, technology and data as well as accelerating the Argos
transformation through dedicated leadership. We have invested further in
hourly colleague pay and made two pay increases in March and August of this
year while investments in technology and automation are driving sustained
benefits in stores and logistics. We have a healthy pipeline of new
initiatives to deliver future efficiency improvements.
We have invested in growing our food footprint in existing supermarkets and
through new store openings in key target locations to ensure that more
customers are able to access the best of our ranges, building on our
competitive advantages in product range and quality. We continue to grow
long-term strategic relationships with key food suppliers, ensuring resilience
and quality of supply and support for ongoing product innovation and
sustainability improvements. We are capitalising further on the strong
foundations we have built across Nectar, extending access to personalised Your
Nectar Prices to more customers and launching Nectar360 Pollen, our world
class retail media platform that will deliver outstanding results for clients
and strong revenue growth for Nectar360.
Our investment in the business is supported by the strength of our balance
sheet and consistent cash generation. This additionally allows us to deliver
healthy returns to shareholders. We anticipate returning more than £800
million to shareholders this financial year through dividends and share
buybacks.
Across the business, we remain confident on delivering on the eight
commitments that we made in February 2024 over the life of the Next Level
Sainsbury's plan:
· 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
Focused investment in our winning combination of value, quality and service
delivered our strongest ever customer offer this Summer, resulting in our
fifth consecutive year of market outperformance(5). We have built a unique
position from which we are consistently balancing great value and trusted
quality for customers, whilst delivering leading service(6). As a result, we
continue to benefit from switching gains from competitors across the whole
market(7) as more and more customers choose Sainsbury's for their big trolley,
main shopping mission(8). We now have nearly one million more loyal primary
customers than four years ago, with primary customer growth significantly
ahead of key competitors(9). We are well set to continue to build on our
Grocery momentum, with strong plans in place to deliver for customers through
the peak Christmas period.
Consistently building a stronger Sainsbury's: focused and effective investment
in our customer offer driving continued momentum and market share gains
· Our focus on great value for customers, wherever they choose to shop with us,
is delivering. We have strengthened our competitive position over the first
half(10), inflating behind the market(11) and our value perception is
improving in supermarkets, convenience and online(12)
· We extended Aldi Price Match to around 800 of the products that customers buy
most often and delivered more personalised value to more customers through the
extension of Your Nectar Prices to all supermarket checkouts (previously only
available on Groceries Online and SmartShop)
· Over the summer we amplified our value messaging alongside a Taste the
Difference brand campaign that celebrated 'everyday trade ups', delivering a
very positive customer response(13) with more and more customers shopping with
us for their full trolley(8). 65 per cent of customers shopped both Aldi Price
Match and Taste the Difference products in the same basket during the half(14)
Further strengthening our leading reputation for delivering outstanding
quality at affordable prices
· Our food quality and innovation sets our offer apart. We are widening the gap
versus competitors on quality perception(15) as we work ever more closely with
suppliers to develop new ranges. We launched more than 600 new products this
Summer, around half of which were Taste the Difference
· We outperformed the market during key Summer occasions(16), with leading
innovation and a great value three for £8 across our Summer deli ranges. This
contributed to Taste the Difference fresh sales growth of 18 per cent and the
biggest Premium Own Label share gains in the market(17)
· We have recently launched our new Taste the Difference Discovery ranges of
expertly-created, restaurant quality meals and premium speciality ingredients
including British Wagyu and Aberdeen Angus steaks and artisan meats, cheeses
and wines. Customer favourites include the Hot Chicken Tikka Masala in our
range of Modern Indian ready meals and the Poachers Pie in our Modern Classics
range. Since launch, premium dine in sales have grown by almost 40 per cent
and we are excited about expanding these ranges as we head into the festive
period
· We reinvented our food-to-order business 'Occasions by Sainsbury's' in March,
combining this service with our groceries online platform so that customers
can shop made-to-order items alongside their everyday groceries, helping drive
bigger online shopping baskets
Growing food space and bringing more of our range to more customers
· We are growing our food space through reallocation of space in existing
supermarkets, selective addition of supermarkets in key target locations and
continued growth of our convenience store portfolio. This will be an
increasing contributor to market share growth as new space matures and the
benefits of space reallocation build while disruption eases
· During the first half, we opened six new supermarkets, including Cromer and
Lowestoft (the first of our 13 Homebase conversions) and two Co-op conversions
in Felixstowe and Brightlingsea. Sales in these new stores are on average
almost 20 per cent ahead of expectations and are on track to deliver the
returns projected. We additionally opened 12 new convenience stores. Subject
to final planning consents, we expect to open another six supermarkets
(including three Homebase conversions) in the second half and around 18 more
convenience stores. Next year we anticipate opening up to 12 new supermarkets,
of which eight will be the remaining Homebase conversions, and at least 25 new
convenience stores
· We have invested selectively in our existing supermarkets, adapting our refit
and space reallocation plans to the trading profile and potential of different
supermarkets and rolling out rapidly the most successful elements. We have
improved the prominence of Nectar Prices and the look and feel of our centre
aisles, extended range, re-located and enhanced presentation in Beers, Wines
and Spirits and have made our Food to Go fixtures more compelling and easier
to shop
· We are pleased with the results in the stores we have invested in, with higher
food sales, higher trading intensity and a strong customer response to the
range improvement. By the end of this financial year we expect to have
invested in 70 of our existing supermarkets
· In total we expect space reallocation together with new supermarkets and
convenience stores to have added around one million square feet of grocery
space by the end of next year, an increase of around six per cent over three
years
· Convenience(18) sales increased 5.2 per cent primarily driven by like for like
sales growth, reflecting a strong performance through the warm and dry Summer
months, benefits of range improvements made last year and a growing
contribution from OnDemand sales
· Groceries Online(19) sales increased 11.4 per cent, with continued
acceleration of OnDemand sales and a strong underlying volume performance
Playing a leading role in creating a more sustainable food system
· We are working to tackle food poverty in our communities. Through our
partnership with Comic Relief, we raised over £2.6 million this summer, which
will fund one million meals for children and families experiencing food
poverty during the school holidays and we have funded more than 100,000
holiday club places across the UK since March. We are also donating £3
million to Comic Relief to help distribute over five million meals during the
winter months through charities such as FareShare, City Harvest and the Felix
Project
· We are supporting farmers and suppliers by giving them greater stability
through long-term partnerships and cost of production models. Our Dairy
Development Group has recently agreed a new financial model in response to
rising costs and upcoming environmental regulation, including over £9 million
of investment from Sainsbury's to support 150 dairy farms
· This year we have switched all our by Sainsbury's black tea to Fairtrade and
as a result we are now the biggest UK grocery retailer of Fairtrade tea.
Farmers will receive a guaranteed price and over £1 million a year in
Fairtrade Premiums. We've also launched a Resilience Building Initiative with
our key tea producers and are working to expand this to coffee and bananas to
further strengthen our supply chains and support communities
· In collaboration with our coffee supplier, we have supported a collective of
women farmers in Colombia, to adopt a new growing model that uses low-carbon
fertiliser, water recycling and native tree planting to build greater
resilience in our coffee supply chain
Improving performance in the products and services that sit alongside our food
offer
· Tu Clothing sales grew 7.8 per cent in H1, outperforming the market for the
fifth consecutive quarter(20), driven by range and availability improvements,
strong online growth and our best ever Back to School performance. Our
customer offer now combines great value with quality design and on-trend
desirability, driving improved customer perception metrics(21). This has
helped deliver an improvement in full price sales
· General Merchandise sales declined in line with expectations as we reduce
General Merchandise space in our stores to support our More for More Food
plan. This has improved trading intensity and profitability
· Smart Charge, our ultra-rapid electric vehicle (EV) charging network,
delivered strong sales and profit growth, with sales per site increasing,
reflecting our industry leading reliability score(22) and improved customer
offer. We operated in 79 locations at the end of the first half, giving
customers access to more than 650 EV charging bays
Stronger than expected proceeds from Bank disposal process, good progress on
future Financial Services income streams
· We have made very good progress with our phased withdrawal from core Banking
products, with stronger than anticipated net proceeds from divestments
alongside the establishment of a number of arrangements with dedicated,
specialist financial services partners. These will allow us to benefit from
long-term financial services income streams that have a stronger connection to
our retail offer. Profits from these income streams will build from next year
and we continue to expect Argos Financial Services income, together with
commission income from ongoing Care, insurance, travel money and ATM
arrangements, to deliver sustainable annual profit of at least £40 million by
February 2028
· During the first half we completed the sale of Sainsbury's Bank core banking
products to NatWest, migrated the ATM business to NoteMachine, signed an
agreement with Allianz UK on car and home insurance and agreed the sale of the
Sainsbury's Bank Travel Money business to Fexco Group. Together with the Argos
Financial Services card portfolio, Travel Money has now been classified as a
discontinued operation(1), reflected in the restatement of Financial Services
underlying operating profit and a change to our short term profit guidance,
where we now expect Financial Services underlying operating profit
contribution to be broadly breakeven in 2025/26
Loyalty everyone loves
Connecting with our customers through Nectar is more important than ever and
we remain focused on delivering more personalised, rewarding and integrated
loyalty. Nectar is at the centre of how customers get great value at
Sainsbury's. Our unique combination of Nectar Prices across nearly 10,000
products, Your Nectar Prices on up to 10 personalised items each week, Nectar
Points and Nectar Offers means that customers can save more than £450 a year
with Nectar, as well as collecting over £170 worth of Points.
This is supporting the growth of our loyal, primary customer base, in turn
benefiting our Nectar360 retail media business, enabling us to support over
900 clients and media agencies with the delivery of more tailored and targeted
marketing to customers. Within a fast-growing UK retail media market,
Nectar360 continues to stand out as a market leader and we are ahead of our
plan to deliver at least £100 million incremental profit over the three years
to March 2027.
Nectar is transforming the way that customers maximise value at Sainsbury's
· We have rolled out Your Nectar Prices across all our supermarket checkouts,
making personalised savings accessible to millions more customers. Customers
increasingly recognise personalised savings as a key reason to shop with
Sainsbury's
· Nectar Prices are a vital component of our value offer. More and more
customers are shopping Nectar Prices, with customers saving an average of £14
on an £80+ big weekly shop
· We are using interactive challenges on the Nectar app to nudge customers
towards healthier food choices. Over the summer we ran a Healthy Choice
challenge where customers were incentivised to shop products with a healthy
choice logo, supporting increased recognition of the logo and delivering an
uplift in healthy choice sales
Investing at scale to accelerate Nectar360 and revolutionise retail media
· We have started the roll-out of our new unified platform Nectar360 Pollen,
giving clients and agencies the ability to access the full potential of our
retail media network. Designed and built in-house, Pollen brings all elements
of running an omnichannel retail media campaign into one seamless platform. It
brings together AI-driven planning, real-time optimisation and integrated
measurement tools, empowering marketeers to build more impactful campaigns,
driving better return on advertising spend and stronger customer engagement.
Early feedback from clients is extremely positive, calling out the usability
of the platform and the benefits of greater visibility and control
· We are scaling our connected retail digital screen network - connecting our
customers with their favourite brands in-store. We are on track to roll out
centre aisle screens to 200 stores by the end of this year, at which point we
will have over 2,500 screens connected through a single content management
system, which will in time be integrated into Pollen. Our large format instore
screens are already delivering around eight per cent brand sales uplift,
demonstrating the value of digital formats in-store as brands look to build
awareness of their ranges
· The Nectar coalition continues to grow with the launch of a new partner in the
charity sector, FareShare, whose mission is to address food waste and food
poverty. Customers will be able to provide support through cash donations or
by donating points, at the same time as earning 10 Nectar points for every £1
donation they make
More Argos, more often
We are making good progress with the Argos transformation plan, with higher
sales, market share growth(23) and improved profitability, particularly
against a second quarter last year where strategic clearance activity
increased sales but diluted trading margins. Sales grew by 2.3 per cent,
supported by warm and dry Summer weather in an otherwise subdued, competitive
and deflationary market. We continue to strengthen our online offer, improving
the digital customer journey and driving higher online traffic and basket
size. We have a strong trading plan in place as we head into the important
Black Friday and Christmas trading period.
Strategic progress
· We are delivering more inspiring choices for customers through extending our
ranges and forming deeper brand partnerships with key suppliers. We continue
to grow our Supplier Direct Fulfilled offer, introducing more than 6,000 new
products so far this year, including new premium brands such as Oura, and have
recently enabled customers to choose to collect in store
· Customers continue to trust Argos to deliver great value, with our Big Red
events supporting improved value perception(24). Alongside this, we have
increased the visibility of value-added services, including pre-order and
trade-in, and we have launched a new partnership with Airtasker. We are also
trialling Argos Plus, a 12-month subscription for free delivery on all orders
greater than £20
· With around 80 per cent of all Argos sales now through digital channels, we
are increasingly focused on personalisation within the Argos digital
experience, providing customers with relevant recommendations based on their
browsing behaviour and inspiration to support bigger basket shopping.
Alongside this, we have upgraded the Argos App, including enhancing product
pages and improving findability, enabling app exclusive offers and making it
easier and faster for app customers to collect their products. More customers
are using the app as a result, with positive customer feedback and strong
revenue growth as we grow loyalty and encourage greater shopping frequency
· We are growing brand awareness and consideration of Argos as a destination for
desirable, premium products, driving greater engagement through social
channels and launching our own podcast
· Having focused in recent years on relocating the Argos estate from standalone
stores to stores and collection points inside Sainsbury's, we are now focusing
on optimising our 1,100 points of presence to provide the best customer
journey at the same time as reducing cost to serve. We are improving the speed
and ease of collection for customers, giving more self-service options and
implementing an improved service model through modernising in-store technology
· We are additionally optimising our market-leading delivery to bring greater
efficiency and modernising our supply chain through a new local fulfilment
centre warehouse system
Save and invest to win
We are on track to deliver £1 billion of cost savings over the three years of
the Next Level plan, with capital investments in high returning technology and
infrastructure programmes and a strong pipeline of cross-functional savings
activity driving structural cost reduction.
· In the first half we closed the remainder of our in-store cafes, hot food,
pizza and patisserie counters and converted our in-store bakery operations to
a bake-off model, delivering significant cost savings, improved bakery ranges
and creating more space for fresh food
· We have finished the commissioning and testing of our physical large-scale
automation and new warehouse management system in Daventry. This has now gone
live and will ultimately house both Argos and Sainsbury's general merchandise
products from 2026. This will deliver significant savings through the
previously announced closure of two regional warehouses in addition to
increasing the capacity, productivity and throughput of the Daventry site
· We are further extending the benefits of our machine learning forecast
platform within our supply chain, through introducing a supplier collaboration
app. This streamlines and simplifies the supplier journey by automating supply
chain interactions, providing greater visibility, self-service functionality
and the capacity to access longer-term forecasts
· We are tackling shrink costs through the rollout of self-checkout video
analytics across our supermarket store estate. This is currently in operation
in more than 200 stores and is outperforming our expectations. We expect to be
live in 400 stores by the end of the financial year
· We are committed to creating safe secure and welcoming environments in our
stores and we are doing everything possible to protect our colleagues and
customers. In September we started a two store trial in partnership with
Facewatch using facial recognition technology to identify serious offenders
entering our stores. We will roll this technology out nationwide if the trial
is successful
· We continue to invest in our digital infrastructure, enabling us to support a
more digital store of the future and implement AI-driven efficiency
opportunities in stores, including reduced energy consumption
Sales performance (exc. VAT)
Like-for-like sales performance 2024/25 2025/26
Q1 Q2 Q3 Q4 Q1 Q2 H1
Like-for-like sales (exc. fuel) 2.9% 4.3% 2.9% 4.0% 4.6%(25) 4.3% 4.5%
Like-for-like sales (inc. fuel) 2.6% 2.2% 0.3% 2.6% 2.2%(25) 2.8% 2.5%
Total sales performance (%) 2024/25 2025/26
Q1 Q2 Q3 Q4 Q1 Q2 H1
Sainsbury's 4.3% 5.2% 3.8% 4.2% 4.9% 5.5% 5.2%
Grocery 4.9% 5.5% 4.2% 4.1% 5.0% 5.7% 5.3%
GM (Sainsbury's) + Clothing (4.5)% 2.0% (0.4)% 6.4% 4.2% 2.1% 3.3%
Argos (7.7)% (1.4)% (1.4)% 1.9% 4.0%(25) 0.1% 2.3%
Total Retail (exc. fuel) 2.6% 4.3% 2.9% 3.9% 4.8%(25) 4.8% 4.8%
Fuel(26) 0.4% (10.6)% (17.4)% (6.8)% (13.6)% (7.8)% (11.3)%
Total Retail (inc. fuel) 2.3% 2.2% 0.3% 2.5% 2.4%(25) 3.2% 2.7%
Total sales performance (£m) 2024/25 2025/26
Q1 Q2 Q3 Q4 Q1 Q2 H1
Sainsbury's 7,431 5,497 8,040 3,690 7,797 5,799 13,596
Grocery 6,995 5,155 7,426 3,484 7,342 5,450 12,792
GM (Sainsbury's) + Clothing 436 342 614 206 455 349 804
Argos 1,077 860 1,611 548 1,120(25) 861 1,981
Total Retail (exc. fuel) 8,508 6,357 9,651 4,238 8,917(25) 6,660 15,577
Fuel(26) 1,291 894 1,116 575 1,115 824 1,939
Total Retail (inc. fuel) 9,799 7,251 10,767 4,813 10,032(25) 7,484 17,516
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 (GMT). This will
be available to view on our website at the following link:
https://sainsburys-2025-26-interim-results.open-exchange.net/
(https://sainsburys-2025-26-interim-results.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
(http://www.about.sainsburys.co.uk/investors/results-reports-and-presentations)
following the event.
Sainsbury's will issue its 2025/26 Third Quarter Trading Statement at 07:00
(GMT) on 9 January 2026.
Enquiries
Investor Relations Media
James Collins Rebecca Reilly
+44 (0) 7801 813 074 +44 (0) 20 7695 7295
LEI: 213800VGZAAJIKJ9Y484
(1) Discontinued operations were previously included in underlying measures
whilst the associated trading activities remained ongoing. Following
completion of the NatWest, NewDay and NoteMachine disposals, these activities
are substantially ceased, and have therefore been reclassified to
non-underlying so as to only reflect ongoing trading performance within
underlying results
(2) Net debt is defined as Retail net debt. Refer to note A3.1 within
Alternative Performance Measures
(3) Return on capital employed: HY 2025/26 is now stated exclusive of
discontinued operations, whereas no adjustment has been made to 2024/25, which
remains as previously presented (on an inclusive of discontinued operations
basis)
(4) In July 2025, the Group announced that it has reached an agreement for the
sale of its Travel Money business to Fexco Group. As a result, Travel Money
results for the 28 weeks to 14 September 2024 have been restated to reclassify
the operations as discontinued. Following the sale of Argos Financial Services
(AFS) cards to NewDay on 28 February 2025, results to 14 September 2024 have
been restated to reflect the AFS component as discontinued
(5) Worldpanel by Numerator Panel (Kantar), City Read, Volume growth YoY, H1
21/22 to H1 25/26, 28 weeks to 14 September 2025
(6) CSAT Supermarket Competitor Benchmarking data - Overall Supermarket
Satisfaction H1 25/26 vs full-choice grocers. Note: H1 25/26 = P2 - P7 data as
P1 data unavailable
(7) Worldpanel by Numerator Panel (Kantar), Total Fresh & Grocery exc.
Kiosk, Retailer to/from Volume net switching gains/losses, 28 weeks to 7
September 2025
(8) Worldpanel by Numerator Panel (Kantar), Total Fresh & Grocery
exc.Kiosk, Main Shop Buyers, 28 weeks to 14 September 2025
(9) Worldpanel by Numerator Panel (Kantar), Total Fresh & Grocery
exc.Kiosk, Primary shopper number growth (actual and %) H1 21/22 to H1 25/26,
28 weeks to 7 September 2025. Primary shopper is defined as any shopper who
bought 40% or more of their groceries at particular retailer within the time
period indicated
(10) Value Reality, Week 28 25/26 vs Week 1 25/26; Acuity, internal modelling
(11) Worldpanel by Numerator Panel (Kantar), City Read universe, ASP YoY %
Growth, 28 weeks to 14 September 2025
(12) CSAT Competitor Benchmarking data - Value for Money - Supermarkets,
Convenience and Online - Q2 25/26 vs Q2 24/25
(13) YouGov Brand Index - Sainsbury's Consideration (4 week average) -
September 2025
(14) Nectar / Groceries Online customers shopping both Aldi Price Match and
Taste the Difference at least once during H1 25/26
(15) YouGov Brand Index - Supermarket Quality perception metric net %, H1
25/26 average score
(16) NielsenIQ EPOS, Total FMCG excl. Kiosk & Tobacco, Units growth YoY
(event week trade adjusted)
(17) Worldpanel by Numerator Panel (Kantar), Total Fresh & Grocery
exc.Kiosk, Premium Own Label tier (excl. Premium Plus tier), Value market
share gains YoY, 28 weeks to 14 September 2025.
(18) Convenience includes sales through OnDemand channels
(19) Grocery Online includes sales through Sainsburys.co.uk and sales through
OnDemand channels
(20) Worldpanel by Numerator Panel (Kantar), Total Clothing, Footwear and
Accessories. YoY retailer spend growth vs the market - from 12 weeks to 15
September 2024 to 12 weeks to 14 September 2025
(21) YouGov Brand Tracking: Value: Q2 25/26 vs Q2 24/25 and Quality: H1 25/26
vs H1 24/25
(22) SmartCharge Reliability Score - Electric vehicle supply equipment data
(inclusive of authorised exemptions) vs UK Government threshold and publicly
available data from key competitors
(23) BRC, Total NFNC exc. H&B & Stationary. Growth vs the Market: 24
weeks to 13 September 2025
(24) Argos CSAT Survey - Value for Money - Q2 25/26 vs Q2 23/24
(25) Argos Q1 sales have been restated following a reallocation of third party
credit sales costs as a deduction to revenue. The restatement has no impact on
profit
(26) Fuel sales represent sales of fuel from our Petrol Filling Stations (PFS)
and sales from our Ultra Rapid Electric Vehicle charging business, Smart
Charge
Financial review for the 28 weeks to 13 September 2025
A number of Alternative Performance Measures (APMs) have been adopted by the
Directors to provide additional information on the underlying performance of
the Group. These measures are intended to supplement, rather than replace the
measures provided under IFRS. Underlying performance within this financial
review refers to the Group's performance on a continuing operations basis,
unless where otherwise stated. Underlying performance measures are reconciled
to their IFRS equivalents on the face of the income statement with
non-underlying items set out in more detail in note 3 to the financial
statements. Other APMs are defined and reconciled to the nearest IFRS measures
in notes A1 to A4.
The comparative results have been restated and re-presented to reflect the
reclassification of Argos Financial Services cards and Travel Money as
discontinued following the respective sale in February 2025, and announced
sale, in July 2025, as part of the strategic review of Financial Services.
Discontinued operations have subsequently been reclassified to non-underlying
(a)). Further details can be found in note 7.
Summary income statement 28 weeks to 28 weeks to Change
13 September 14 September
2025 2024
£m £m %
Underlying group sales (excluding VAT) 17,581 17,107 2.8
Underlying operating profit
Retail 504 503 0.2
Financial Services 2 (29) -
Total underlying operating profit 506 474 6.8
Underlying net finance costs (166) (165) (0.6)
Underlying profit before tax 340 309 10.0
Items excluded from underlying results (69) (51) (35.3)
Profit before tax 271 258 5.0
Income tax expense (86) (83) (3.6)
Profit after tax - continuing operations 185 175 5.7
Loss after tax - discontinued operations (20) (99) 79.8
Profit for the financial period 165 76 117.1
Underlying basic earnings per share 10.3p 9.2p 12.0
Underlying diluted earnings per share 10.2p 9.1p 12.1
Basic earnings per share 7.2p 3.2p 125.0
Diluted earnings per share 7.1p 3.2p 121.9
Interim dividend per share 4.1p 3.9p 5.1
a) Discontinued operations were previously included in underlying measures whilst
the associated trading activities remained ongoing. Following completion of
the NatWest, NewDay and NoteMachine disposals, these activities are
substantially ceased, and have therefore been reclassified to non-underlying
so as to only reflect ongoing trading performance within underlying results
In the 28 weeks to 13 September 2025, Underlying group sales grew by 2.8 per
cent, with a 4.8 per cent increase in retail sales (excluding fuel) offset by
an 11.3 per cent decrease in fuel sales as a result of both lower demand and
lower forecourt prices year-on-year.
Underlying retail operating profit of £504 million was in-line with last
year, with strong sales especially in seasonal lines and the continued
delivery of our cost savings programme offsetting higher operating costs,
including increased National Insurance Contributions and the impact of the new
Extended Producer Responsibility (EPR) levy. Financial services contributed an
underlying operating profit of £2 million (HY 2024/25 loss of £29 million),
driven by reduced funding costs as a result of the ongoing strategic exit.
Underlying net finance costs of £166 million grew by 0.6 per cent leading to
an underlying profit before tax of £340 million (HY 2024/25: £309 million).
Underlying basic EPS increased to 10.3 pence (HY 2024/25: 9.2 pence),
primarily due to an increase in underlying earnings and a reduction in the
weighted average number of shares as a result of the share buyback programme.
Items excluded from underlying results of £69 million, largely driven by our
retail restructuring programmes, led to a profit before tax of £271 million
(HY 2024/25: £258 million). Statutory diluted EPS increased to 7.1 pence (HY
2024/25: 3.2 pence).
Group sales
Total sales (excluding VAT) performance by category 28 weeks to 28 weeks to Change
13 September 2025 14 September 2024
£m £m %
Sainsbury's 13,596 12,928 5.2
Grocery 12,792 12,150 5.3
General Merchandise (Sainsbury's) and Clothing 804 778 3.3
Argos 1,981 1,937 2.3
Retail (exc. Fuel) 15,577 14,865 4.8
Fuel sales (a)) 1,939 2,185 (11.3)
Retail (inc. Fuel) 17,516 17,050 2.7
Financial Services 65 57 14.0
Group sales 17,581 17,107 2.8
Retail like-for-like sales performance 28 weeks to 28 weeks to
13 September 2025 14 September
2024
Like-for-like sales (exc. fuel) 4.5% 3.5%
Like-for-like sales (inc. fuel (a))) 2.5% 2.4%
a) Fuel sales represent sales of fuel from our Petrol Filling Stations (PFS) and
sales from our Ultra Rapid Electric Vehicle charging business, Smart Charge
Grocery sales increased by 5.3 per cent, with continued market share gains and
favourable weather driving volume growth and inflation driven by higher
operating costs, partly offset by our continued investment in value. Our Taste
the Difference and Summer Eating ranges performed strongly alongside Aldi
Price Match products, where we invested further in the products that customers
buy most often.
General merchandise and Clothing sales increased by 3.3 per cent. Strong
Clothing growth, driven by improved ranges and strong availability, were
partially offset by lower general merchandise sales, reflecting reduced space
allocation in stores and subdued consumer spending on discretionary items.
Argos sales increased by 2.3 per cent, driven by volume growth outperformance
in a highly competitive, deflationary market. We were well positioned for the
strong early seasonal weather in the first quarter and made further underlying
progress in the second quarter against tough comparatives, when volumes last
year were boosted by a high level of clearance activity.
Fuel sales decreased by 11.3 per cent as a consequence of both reduced demand
and lower forecourt prices driven by falling commodity prices. In contrast,
Smart Charge sales continue to grow, supported by our expanding offering and
rising market demand. We operated in 79 Smart Charge locations at the end of
the first half, giving customers access to 653 ultra-rapid charging bays.
Total sales growth (including VAT) performance by channel 28 weeks to 28 weeks to
13 September 2025 14 September
2024
% %
Total sales fulfilled by supermarket stores 4.3 4.7
Supermarkets (inc. Argos stores in Sainsbury's) 3.1 3.7
Groceries Online (a)) 11.4 11.2
Convenience (b)) 5.2 4.9
a) Grocery Online includes sales through Sainsburys.co.uk and sales through
OnDemand channels
b) Convenience includes sales through OnDemand channels
Supermarket sales increased by 3.1 per cent. We have continued to reallocate
space in our supermarkets to increase our food offering; delivering a broader
range, greater choice and improved availability.
Groceries online sales grew 11.4 per cent, reflecting higher order numbers and
increased average basket size.
Convenience sales increased by 5.2 per cent, driven by new store openings and
a continued increase in OnDemand sales.
Retail underlying operating profit
Retail underlying operating profit Note (b)) 28 weeks to 28 weeks to Change
13 September 14 September
2025 2024
Retail underlying operating profit (£m) A1.2 a) 504 503 0.2%
Retail underlying operating margin (%) A1.2 a) 2.88 2.95 (7) bps
Retail underlying EBITDA (£m) A1.2 d) 1,136 1,119 1.5%
Retail underlying EBITDA margin (%) A1.2 d) 6.49 6.56 (7) bps
b) Note references for reconciliations refer to the Alternative Performance
Measures
Retail underlying operating profit increased by 0.2 per cent to £504 million
(HY 2024/25: £503 million), while retail underlying operating margin declined
by 7 basis points to 2.88 per cent (HY 2024/25: 2.95 per cent). The first-half
results include the full year charge for the EPR levy. This, together with
operating cost inflation, was partially offset by volume growth in
Sainsbury's, ongoing cost efficiencies and an improvement in Argos
profitability.
Retail underlying EBITDA increased to £1,136 million (HY 2024/25: £1,119
million), although the underlying EBITDA margin decreased by 7 basis points to
6.49 per cent (HY 2024/25: 6.56 per cent), primarily due to cost inflation and
the impact of the EPR charge recognised in the first half.
In 2025/26, we expect a retail underlying depreciation and amortisation charge
of around £1.2 billion (2024/25: £1.2 billion), including £0.5 billion
right-of-use asset depreciation.
We expect to deliver retail underlying operating profit of more than £1
billion in 2025/26.
Space
Store numbers and retailing space As at New stores Disposals / Closures Reclassification / Extension As at
1 March 13 September 2025
2025
Supermarkets 599 6 - - 605
Supermarkets area '000 sq ft 20,930 93 - 22 21,045
Convenience 855 12 (1) - 866
Convenience area '000 sq ft 2,054 30 (2) 1 2,083
Sainsbury's total store numbers 1,454 18 (1) - 1,471
Argos stores 203 1 (2) - 202
Argos stores in Sainsbury's 461 2 - - 463
Argos total store numbers 664 3 (2) - 665
Argos collection points 443 12 (8) - 447
Sainsbury's opened six new supermarkets and 12 new convenience stores in the
first half and closed one convenience store. We opened two new Argos stores in
Sainsbury's, opened one standalone Argos store and closed two. As at 13
September 2025, Argos had 665 stores, including 463 stores in Sainsbury's, and
a total of 1,112 points of presence.
During 2024/25 we acquired 14 sites from Homebase and Co-Op and we have
subsequently agreed terms on a further site. Four of these sites are included
in the new supermarket openings in the first half.
Subject to final planning consent, we expect to open another six supermarkets
in total (including three Homebase locations) before the end of the year. The
remaining Homebase sites will be converted to Sainsbury's supermarkets by
2026/27, complementing our existing organic supermarket growth pipeline. In
addition, we expect to open around 18 more convenience stores in the second
half of the year. Overall, we expect a net space growth impact on retail sales
of around 0.5 per cent in 2025/26.
Financial Services
During the year we successfully completed the sale of our Core Banking
Products, migrated the Sainsbury's Bank ATM Business and agreed the future
sale of our Travel Money business. These divestments, along with the
previously sold Argos Financial Service Card portfolio, have been classified
as discontinued operations and are now reported as items excluded from
underlying results. Together they form part of the single, co-ordinated
strategy to transition towards a distributed financial services model which
was announced in January 2024.
In addition, we entered into an agreement with Allianz giving them the right
to offer replacement Car and Home insurance policies to our current policy
holders. These operations continue to be reported as part of the continuing
operations, alongside our broader insurance offering across Pet, Life and
Travel.
Financial Services results 6 months to 6 months to Change
31 August 2025 31 August 2024
£m £m %
Underlying revenue 65 57 14.0
Underlying operating profit 2 (29) -
Financial Services underlying revenue increased by 14 per cent during the
period, driven by higher income on treasury assets.
Underlying operating profit of £2 million increased by £31 million,
reflecting reduced wholesale funding and deposit platform cost as we move to a
distributed Financial Services model.
Following the reclassification of Core Banking Products into discontinued
operations, we now expect Financial Services underlying operating profit to be
around breakeven for 2025/26.
Underlying net finance costs
28 weeks to 28 weeks to Change
Underlying net finance costs 13 September 2025 14 September
2024
£m £m %
Non-lease interest costs (35) (41) 14.6
Non-lease interest income 11 14 (21.4)
Finance costs on lease liabilities (142) (138) (2.9)
Total underlying net finance costs (166) (165) 0.6
Underlying net finance costs increased slightly to £166 million (HY 2024/25:
£165 million). This includes £24 million of net non-lease cost (HY 2024/25:
£27 million); with the reduction primarily driven by lower interest costs
incurred on our inflation-linked amortising loan due in 2031. This was partly
offset by a decline in interest income due to lower interest rates.
Net financing costs on lease liabilities rose to £142 million (HY 2024/245
£138 million), reflecting higher costs associated with equipment leases and
property regears, which increased the lease liabilities.
We expect underlying net finance costs in 2025/26 of between £300 million and
£310 million, including around £265 million of lease interest costs.
Items excluded from underlying results
To provide shareholders with insight into the underlying performance of the
business, items recognised in reported profit before tax which, by virtue of
their size and/or nature, do not reflect the Group's underlying performance
are excluded from the Group's underlying results and shown in the table below.
Items excluded from underlying results 28 weeks to 28 weeks to
13 September 14 September
2025 2024
£m £m
Continuing Operations:
Retail restructuring programmes (58) (37)
IAS 19 pension income 16 14
Property, finance and acquisition adjustments (16) (6)
Other (9) (12)
Financial Services phased withdrawal (2) (10)
Items excluded from underlying results from continuing operations (69) (51)
Discontinued Operations:
Financial Services phased withdrawal (26) (127)
Items excluded from underlying - discontinued operations (26) (127)
Total items excluded from underlying results (95) (178)
Continuing operations
Retail restructuring programme costs of £58 million (HY 2024/25: £37
million) were recognised. Of this, £44 million (HY 2024/25: £37 million)
related to the multi-year programme announced in November 2020. The majority
of this programme has now been completed. We recognised £14 million (HY
2024/25: £nil) of costs associated with Sainsbury's Next Level strategy,
launched in February 2024. We have now incurred £75 million of costs to date
in relation to this three-year restructuring programme.
IAS 19 pension income remained consistent at £16 million (HY 2024/25: £14
million).
Property, finance and acquisition adjustments relate to £9 million
amortisation of brands, £5 million of non-underlying finance costs, and a £2
million loss on fair value movements on fixed price power purchase
arrangements (HY 2024/25: £9 million of brand amortisation and £5 million of
non-underlying finance costs, offset by a £5 million gain on disposal of
non-trading properties and a £3 million gain on fair value movements on fixed
price power purchase arrangements).
Other costs relate to impairment on non-trading sites, reflecting rent reviews
and consultancy costs in relation to corporate transaction activity, offset by
income from a legal case in relation to European truck manufacturers (HY
2024/25: impairment on non-trading sites).
Costs associated with the phased withdrawal from Financial Services announced
in January 2024 comprise £1 million of transaction costs associated with the
withdrawal and £1 million of employee costs (HY 2024/25: £2 million of
employee costs, £6 million of onerous contracts, and £2 million of
consultancy fees).
Discontinued operations
This comprises a £5 million operating loss associated with discontinued
Financial Services operations and £21 million of costs associated with the
withdrawal, comprising; employee costs, transaction costs and loss on
derivatives no longer classified in an effective hedge relationship (HY
2024/25: represents £47 million operating profit, £104 million loss on
disposal and £70 million of costs associated with the withdrawal).
Taxation
The tax charge was £86 million (HY 2024/25: £83 million) and the effective
tax rate was 31.7 per cent (HY 2024/25: 32.2 per cent). The underlying tax
rate was 30.3 per cent (HY 2024/25: 29.8 per cent), based on an underlying
charge of £103 million (HY 2024/25: £92 million).
The effective tax rate for the half year is higher than the headline tax rate
primarily due to the effect of depreciation charged on assets which do not
qualify for capital allowances.
We expect an underlying tax rate in 2025/26 of around 30 per cent.
Earnings per share
Statutory basic EPS increased to 7.2 pence (HY 2024/25: 3.2 pence) due to an
increase in statutory earnings and a reduction in the weighted average number
of shares as a result of the share buyback programme. Statutory diluted EPS
also increased, to 7.1 pence (HY 2024/25: 3.2 pence).
Underlying basic EPS increased to 10.3 pence (HY 2024/25: 9.2 pence), due to
an increase in underlying earnings and a reduction in the weighted average
number of shares as a result of the share buyback programme. Underlying EPS
increased to 10.2 pence (HY 2024/25: 9.1 pence).
Dividends and Share Buyback
The Board has recommended an interim dividend of 4.1 pence per share (HY
2024/25: 3.9 pence). Consistent with prior years, this represents 30% of the
prior year's full year dividend per share. This will be paid on 19 December
2025 to shareholders on the Register of Members at the close of business on 14
November 2025.
Sainsbury's has a Dividend Reinvestment Plan (DRIP). This allows shareholders
to reinvest their cash dividends in our shares. The last date that
shareholders can elect for the DRIP is 28 November 2025.
We now expect net cash proceeds from the disposal of our banking operations to
exceed £400 million. As previously announced, we will return £250 million of
these proceeds to shareholders via a special dividend of 11.0 pence per share.
This will be paid on 19 December 2025 to shareholders on the Register of
Members at the close of business on 14 November 2025.
We will additionally return £150 million of bank disposal proceeds through
share buybacks, with £50 million to be added to the core £200 million
buyback in financial year 2025/26 and £100 million to be added to the core
buyback in financial year 2026/27.
We announced in April 2025 that we would buy back £200 million of shares in
the financial year 2025/26. We bought back 56,797,534 shares with an aggregate
purchase price of £158 million in the period between 22 April 2025 and 12
September 2025. We will complete the remaining £42 million of this programme
by the end of the 2025/26 financial year as well as the additional £50
million mentioned above.
Net debt and retail cash flows
Summary retail cash flow statement Note (a)) 28 weeks to 28 weeks to 52 weeks to
13 September 14 September 1 March
2025 2024 2025
£m £m £m
Retail underlying operating profit 4 504 503 1,036
Adjustments for:
Retail underlying depreciation and amortisation 632 616 1,156
Share-based payments and other 33 32 67
Adjusted retail underlying operating cash flow before changes in working 1,169 1,151 2,259
capital
Decrease in underlying working capital 141 179 98
Retail non-underlying operating cash flows (excluding pensions) (61) (29) (71)
Pension cash contributions (13) (23) (45)
Retail cash generated from operations 1,236 1,278 2,241
Interest paid (179) (182) (347)
Corporation tax paid (37) (22) (89)
Retail net cash generated from operating activities 1,020 1,074 1,805
Cash capital expenditure (475) (394) (825)
Repayments of lease liabilities (245) (243) (487)
Initial direct costs on right-of-use assets (3) (34) (34)
Proceeds from disposal of property, plant and equipment 1 7 45
Interest received 12 15 27
Retail free cash flow 310 425 531
Dividends paid on ordinary shares (223) (217) (308)
Purchase of own shares - share buyback (158) (136) (200)
Net repayment of borrowings (28) (22) (79)
Other share-related transactions 6 (12) (43)
Dividend received from Sainsbury's Bank 300 - -
Financial Services strategic review (50) (10) (52)
Net increase/(decrease) in cash and cash equivalents 157 28 (151)
Decrease in debt 273 265 566
Other non-cash and net interest movements (b)) (199) (323) (619)
Movement in net debt 12 231 (30) (204)
Opening net debt 12 (5,758) (5,554) (5,554)
Closing net debt 12 (5,527) (5,584) (5,758)
Of which:
Lease liabilities 12 (5,446) (5,432) (5,494)
Net debt excluding lease liabilities (81) (152) (264)
a) Note references relate to the financial statements. Other figures are
reconciled in Notes A2.1 and A2.2 of the APMs
b) Other non-cash movements relate to new leases, foreign exchange, the
cancellation of own shares once purchased and fair value adjustments relating
to derivatives
Retail free cash flow declined by £115 million year-on-year to £310 million
(HY 2024/25: £425 million), driven by a reduction in working capital inflow
and higher capital expenditure. We expect to generate more than £500 million
of retail free cash flow in 2025/26, in line with our commitment to generate
at least £1.6 billion of retail free cash flow over the three years to
2026/27.
Adjusted retail underlying operating cash flow before changes in working
capital increased by £18 million year-on-year to £1,169 million (HY 2024/25:
£1,151 million), driven by higher underlying EBITDA.
Cash inflow from reduced working capital of £141 million (HY 2024/25: £179
million) was driven primarily by food sales growth. The £38 million
year-on-year reduction primarily reflects timing differences and a lower level
of inventory reduction year-on-year.
Retail non-underlying operating cash costs were £61 million (HY 2024/25: £29
million). £55 million of this relates to retail restructuring cash costs,
with £9 million related to the multi-year programme announced in November
2020 and £46 million associated with Sainsbury's Next Level strategy,
launched in February 2024. We continue to expect total cash costs relating to
the three-year Next Level Sainsbury's strategy restructuring programme of
around £150 million, with £77 million incurred to date.
Pension cash contributions of £13 million (HY 2024/25: £23 million) reduced
by £10 million year-on-year due to a funding level event occurring in 2024/25
leading to reduced contributions under the Asset Backed Contributions scheme.
We expect pension cash contributions in 2025/26 to be around £26 million.
We paid corporation tax of £37 million in the period (HY 2024/25: £22
million).
Cash capital expenditure was £475 million (HY 2024/25: £394 million). The
year-on-year increase of £81 million was primarily due to investment in new
space and the rollout of Homebase stores acquired in the prior financial year.
We continue to expect core retail cash capital expenditure (excluding
Financial Services) in 2025/26 to be between £800 million and £850 million.
Dividends of £223 million were paid in the period, covered 1.4 times by free
cash flow (HY 2024/25: 1.9 times).
On 22 April 2025 we commenced a share buyback programme of up to £200
million, of which we had bought back shares with an aggregate purchase price
of £158 million by 12 September 2025. The programme will complete by the end
of the 2025/26 financial year.
A dividend of £300 million was received by the Retail Group from Sainsbury's
Bank and £50 million of costs were incurred by the Retail Group as part of
the continued phased withdrawal from financial services.
As at 13 September 2025, net debt was £5,527 million (1 March 2025: £5,758
million), a decrease of £231 million. Excluding the impact of lease
liabilities, non-lease net debt decreased by £183 million in the year, to
£81 million (1 March 2025: £264 million). Both reductions were impacted by
the net cash proceeds arising from the phased withdrawal from financial
services.
Net debt includes lease liabilities which decreased by £48 million to £5,446
million (1 March 2025: £5,494 million).
Financial Ratios
Key financial ratios (a) b)) As at As at As at
13 September 14 September 1 March
2025 2024 2025
Return on capital employed 9.0% 8.5% 9.0%
Net debt to EBITDA 2.5x 2.6x 2.6x
Fixed charge cover 2.8x 2.7x 2.8x
a) Reconciliations are set out in notes A4.1, A3.2 and A4.2 of the APMs
b) Comparatives shown are as previously reported and have not been restated for
changes to discontinued operations.
Return on capital employed (ROCE) improved 50 basis points, primarily driven
by improved underlying retail operating profit across a rolling 52 week basis.
Sainsbury's continues to target leverage of 3.0x - 2.4x to deliver a solid
investment grade balance sheet. Net debt to EBITDA remains stable within the
targeted leverage range. Fixed charge cover is stable.
Defined benefit pensions
At 13 September 2025, the net defined benefit surplus under IAS 19 for the
Group was £668 million (excluding deferred tax). This marks a decrease of
£63 million from the year-end date of 1 March 2025 primarily due to a slight
narrowing of AA credit spreads over the half year, and a change in demographic
assumptions in particular using the latest CMI mortality projection model,
both of which have led to an increase in obligations.
An updated triennial funding valuation of the Scheme is currently being
carried out with an effective date of 30 September 2024.
For 2025/26, the total defined benefit pension scheme contributions are
expected to be £26 million (2024/25: £45 million).
Sainsbury's Argos Group Group
Retirement benefit obligations as at as at as at as at
13 September 13 September 13 September 1 March
2025 2025 2025 2025
£m £m £m £m
Present value of funded obligations (4,628) (723) (5,351) (5,575)
Fair value of plan assets 5,172 869 6,041 6,329
Net funded pension plan asset 544 146 690 754
Present value of unfunded obligations (12) (10) (22) (23)
Net retirement benefit surplus 532 136 668 731
Deferred income tax liability (163) (36) (199) (218)
Net retirement benefit surplus (net of deferred tax) 369 100 469 513
Group income statement
28 weeks to 13 September 2025 28 weeks to 14 September 2024 (restated*)
Underlying items Non-underlying items Total Underlying items Non-underlying items Total
(Note 3)
(Note 3)
Note £m £m £m £m £m £m
Continuing operations
Revenue 4 17,581 - 17,581 17,107 - 17,107
Cost of sales (16,398) (50) (16,448) (15,969) (34) (16,003)
Gross profit/(loss) 1,183 (50) 1,133 1,138 (34) 1,104
Administrative expenses (718) (40) (758) (694) (34) (728)
Other income 41 6 47 30 5 35
Operating profit/(loss) 506 (84) 422 474 (63) 411
Finance income 5 12 22 34 15 18 33
Finance costs 5 (178) (7) (185) (180) (6) (186)
Profit/(loss) before tax - continuing operations 340 (69) 271 309 (51) 258
Income tax (expense)/credit 6 (103) 17 (86) (92) 9 (83)
Profit/(loss) after tax - continuing operations 237 (52) 185 217 (42) 175
Loss after tax - discontinued operations 7 - (20) (20) - (99) (99)
Profit/(loss) for the financial period 237 (72) 165 217 (141) 76
Earnings per share 8 pence pence pence pence
Basic - total 10.3 7.2 9.2 3.2
Diluted - total 10.2 7.1 9.1 3.2
Earnings per share - from continuing operations 8
Basic - continuing 8.1 7.5
Diluted - continuing 7.9 7.3
*Comparative periods have been re-presented to reflect the phased exit of
Financial Services in discontinued operations and the reclassification of
discontinued operations to non-underlying. Refer to note 2 for further
details.
52 weeks to 1 March 2025 (restated*)
Underlying items Non-underlying items Total
(Note 3)
Note £m £m £m
Continuing operations
Revenue 4 32,772 - 32,772
Cost of sales (30,511) (78) (30,589)
Gross profit/(loss) 2,261 (78) 2,183
Administrative expenses (1,302) (99) (1,401)
Other income 55 53 108
Operating profit/(loss) 1,014 (124) 890
Finance income 5 31 36 67
Finance costs 5 (336) (14) (350)
Profit/(loss) before tax - continuing operations 709 (102) 607
Income tax (expense)/credit 6 (212) 15 (197)
Profit/(loss) after tax - continuing operations 497 (87) 410
Loss after tax - discontinued operations 7 - (168) (168)
Profit/(loss) for the financial period 497 (255) 242
Earnings per share 8 pence pence
Basic - total 21.3 10.4
Diluted - total 20.9 10.2
Earnings per share - from continuing operations 8
Basic - continuing 17.6
Diluted - continuing 17.3
*Comparative periods have been re-presented to reflect the phased exit of
Financial Services in discontinued operations and the reclassification of
discontinued operations to non-underlying. Refer to note 2 for further
details.
Group statement of comprehensive income
28 weeks to 28 weeks to 52 weeks to 1 March 2025 (restated*)
13 September 2025 14 September 2024
(restated*)
Note £m £m £m
Profit for the financial period 165 76 242
Items that will not be reclassified subsequently to the income statement
Remeasurement on defined benefit pension schemes 15 (93) 24 (33)
Cash flow hedges fair value movements - inventory hedges (27) (23) 1
Current tax relating to items not reclassified - - (1)
Deferred tax relating to items not reclassified 30 (6) 9
(90) (5) (24)
Items that may be reclassified subsequently to the income statement
Movements on other financial assets at fair value through other comprehensive - 2 1
income
Items reclassified from other financial assets at fair value through other (1) - -
comprehensive income reserve
Cash flow hedges fair value movements - non-inventory hedges (2) (14) 13
Items reclassified from cash flow hedge reserve - non-inventory hedges 2 - 2
Deferred tax on items that may be reclassified - 6 (4)
(1) (6) 12
Total other comprehensive loss for the financial period (net of tax) (91) (11) (12)
Total comprehensive income for the financial period 74 65 230
Analysed as:
Continuing operations 94 164 398
Discontinued operations 7 (20) (99) (168)
Total comprehensive income for the financial period 74 65 230
*Comparative periods have been re-presented to reflect the phased exit of
Financial Services in discontinued operations. Refer to note 2 for further
details.
Group balance sheet
13 September 2025 1 March 14 September 2024 (restated*)
2025
(restated*)
Note £m £m £m
Non-current assets
Property, plant and equipment 9,355 9,358 9,178
Right-of-use assets 4,371 4,455 4,389
Intangible assets 819 807 811
Investments in joint ventures and associates 2 2 2
Other financial assets 10 126 769 1,030
Trade and other receivables 26 42 36
Amounts due from Financial Services customers and other banks 10 - - 2
Derivative financial instruments 10 30 35 16
Retirement benefit surplus 15 690 754 776
15,419 16,222 16,240
Current assets
Inventories 2,023 1,946 1,926
Trade and other receivables 499 572 683
Amounts due from Financial Services customers and other banks 10 - - 844
Other financial assets 10 197 612 248
Derivative financial instruments 10 7 15 43
Income taxes receivable 48 74 56
Cash and cash equivalents 11 1,271 2,777 1,591
4,045 5,996 5,391
Assets of disposal group and non-current assets held for sale 7, 14 28 2,527 3,086
4,073 8,523 8,477
Total assets 19,492 24,745 24,717
Current liabilities
Trade and other payables (5,580) (5,489) (5,353)
Amounts due to Financial Services customers and other deposits 10 (138) (1,955) (1,619)
Borrowings 13 (80) (72) (75)
Lease liabilities (509) (483) (480)
Derivative financial instruments 10 (39) (15) (74)
Income taxes payable (2) (4) -
Provisions (198) (230) (65)
Financial liabilities 12 - - (14)
(6,546) (8,248) (7,680)
Liabilities of disposal group held for sale 7, 14 - (3,136) (3,655)
(6,546) (11,384) (11,335)
Net current liabilities (2,473) (2,861) (2,858)
Non-current liabilities
Trade and other payables (20) (24) (15)
Amounts due to Financial Services customers and other deposits 10 - (13) (18)
Borrowings 13 (1,012) (1,042) (1,105)
Lease liabilities (4,937) (5,011) (4,952)
Derivative financial instruments 10 (4) (11) (27)
Retirement benefit deficit 15 (22) (23) (25)
Deferred income tax liability (429) (429) (368)
Provisions (129) (157) (259)
(6,553) (6,710) (6,769)
Total liabilities (13,099) (18,094) (18,104)
Net assets 6,393 6,651 6,613
Equity
Called up share capital 655 669 675
Share premium 1,464 1,448 1,447
Merger reserve 173 173 568
Capital redemption and other reserves (14) (54) (85)
Retained earnings 4,115 4,415 4,008
Total equity shareholders' funds 6,393 6,651 6,613
*Certain line items in the comparative periods have been re-presented. Refer
to note 2 for further details.
Group statement of changes in equity
Called up share capital Share premium account Merger reserve Capital redemption and other reserves Retained earnings Total Equity
28 weeks to 13 September 2025 Note £m £m £m £m £m £m
At 2 March 2025 669 1,448 173 (54) 4,415 6,651
Profit for the period - - - - 165 165
Other comprehensive loss (pre-tax) - - - (28) (93) (121)
Tax relating to components of other comprehensive loss - - - 7 23 30
Total comprehensive (loss)/income - - - (21) 95 74
Cash flow hedges gains transferred to inventory - - - (2) - (2)
Transactions with owners:
Dividends 9 - - - - (223) (223)
Share-based payment - - - - 42 42
Purchase of own shares for share schemes - - - (12) - (12)
Shares allocated in respect of share option schemes 2 16 - 59 (59) 18
Purchase of own shares for cancellation 12 - - - (158) - (158)
Cancellation of own shares a) (16) - - 174 (158) -
Tax on items charged to equity - - - - 3 3
At 13 September 2025 655 1,464 173 (14) 4,115 6,393
a) During the period, 56.8 million of the Company's own shares were purchased,
and subsequently cancelled, for total consideration of £158 million inclusive
of £1 million of directly attributable costs. £158 million has been
transferred from the investment in own share reserve (within capital
redemption and other reserves) to retained earnings and £16 million of share
capital has been transferred to the capital redemption reserve owing to the
cancellation.
Called up share capital Share premium account Merger reserve Capital redemption and other reserves Retained earnings Total Equity
28 weeks to 14 September 2024 Note £m £m £m £m £m £m
At 3 March 2024 678 1,430 568 955 3,237 6,868
Profit for the period - - - - 76 76
Other comprehensive (loss)/income (pre-tax) - - - (35) 24 (11)
Tax relating to components of other comprehensive (loss)/income - - - 6 (6) -
Total comprehensive income/(loss) - - - (29) 94 65
Cash flow hedges losses transferred to inventory - - - 13 - 13
Transactions with owners:
Transfer between reserves a), b) - - - (1,029) 1,029 -
Dividends 9 - - - - (217) (217)
Share-based payment - - - - 42 42
Purchase of own shares for share schemes - - - (32) - (32)
Shares allocated in respect of share option schemes 12 17 - 32 (42) 19
Purchase of own shares for cancellation 12 - - - (150) - (150)
Cancellation of own shares (15) - - 155 (140) -
Tax on items charged to equity - - - - 5 5
At 14 September 2024 675 1,447 568 (85) 4,008 6,613
a) The capital redemption reserve as at 3 March 2024 amounted to £680 million
and was created upon the redemption of class B shares following shareholder
approval at the Company's extraordinary general meeting held on 12 July 2004
to return £680 million of share capital. The final redemption date for such
class B shares was 18 July 2007 with all transactions relating to the class B
shares therefore completed. Following approval by the High Court registered on
31 July 2024, £680 million has been reclassified as available for
distribution to shareholders in accordance with ICAEW Technical Release
02/17BL section 2.8A and as a result has been transferred to retained
earnings.
b) During the period, £349 million has been transferred from Financial asset
reserves (within capital redemption and other reserves) to retained earnings.
This amount represented the fair value gains and losses on the Group's
financial asset relating to its beneficial interest in a commercial property
investment pool, which was held at fair value through other comprehensive
income. Given the financial asset relating to the property pool has been
derecognised, there is no longer a legally separable reserve for these fair
value gains and losses and therefore the amount has been transferred to
retained earnings.
Called up share capital Share premium account Merger reserve Capital redemption and other reserves Retained earnings Total Equity
52 weeks to 1 March 2025 Note £m £m £m £m £m £m
At 3 March 2024 678 1,430 568 955 3,237 6,868
Profit for the period - - - - 242 242
Other comprehensive income/(loss) (pre-tax) - - - 17 (33) (16)
Tax relating to components of other comprehensive income/(loss) - - - (4) 8 4
Total comprehensive income - - - 13 217 230
Cash flow hedges losses transferred to inventory - - - 18 - 18
Transactions with owners:
Transfer between reserves a), b), c) - - (395) (1,035) 1,430 -
Dividends 9 - - - - (308) (308)
Share-based payment - - - - 80 80
Purchase of own shares for share schemes - - - (63) - (63)
Shares allocated in respect of share option schemes 12 18 - 37 (44) 23
Purchase of own shares for cancellation 12 - - - (200) - (200)
Cancellation of own shares (21) - - 221 (200) -
Tax on items charged to equity - - - - 3 3
At 1 March 2025 669 1,448 173 (54) 4,415 6,651
a) The capital redemption reserve as at 3 March 2024 amounted to £680 million
and was created upon the redemption of class B shares following shareholder
approval at the Company's extraordinary general meeting held on 12 July 2004
to return £680 million of share capital. The final redemption date for such
class B shares was 18 July 2007 with all transactions relating to the class B
shares therefore completed. Following approval by the High Court registered on
31 July 2024, £680 million has been reclassified as available for
distribution to shareholders in accordance with ICAEW Technical Release
02/17BL section 2.8A and as a result has been transferred to retained
earnings.
b) During the period, £355 million has been transferred from Financial asset
reserves (within capital redemption and other reserves) to retained earnings.
This amount represented the fair value gains and losses on the Group's
financial asset relating to its beneficial interest in a commercial property
investment pool, which was held at fair value through other comprehensive
income. Given the financial asset relating to the property pool has been
derecognised, there is no longer a legally separable reserve for these fair
value gains and losses and therefore the amount has been transferred to
retained earnings.
c) The merger reserve as at 3 March 2024 amounted to £568 million and was
created following the issuance of 261 million shares in 2016 as part
consideration for the acquisition of Home Retail Group plc. During the year,
£395 million has been transferred to retained earnings and classified as
available for distribution to shareholders in accordance with ICAEW Technical
Release 02/17BL section 3.9 following an impairment being recognised in J
Sainsbury plc over its subsidiary's investment in the acquisition holding
company. The related impairment has no impact on Group results.
Group cash flow statement
28 weeks to 28 weeks to 52 weeks to 1 March 2025 (restated*)
13 September 14 September 2024
2025 (restated*)
Note £m £m £m
Cash flows from operating activities
Cash generated from operations - continuing operations 12 471 784 1,760
Interest paid (185) (188) (359)
Corporation tax paid (21) (19) (53)
Net cash generated from operating activities - continuing operations 265 577 1,348
Cash flows from investing activities
Purchase of property, plant and equipment (361) (296) (617)
Initial direct costs on new leases (3) (34) (34)
Purchase of intangible assets (114) (98) (208)
Proceeds from disposal of property, plant and equipment 1 7 45
Interest received 12 15 27
Net cash used in investing activities - continuing operations (465) (406) (787)
Cash flows from financing activities
Proceeds from issuance of ordinary shares 18 20 20
Proceeds from borrowings - - 544
Repayment of borrowings (28) (22) (623)
Purchase of own shares for share schemes (12) (32) (63)
Purchase of own shares for cancellation 12 (158) (136) (200)
Capital repayment of lease obligations (245) (243) (487)
Dividends paid on ordinary shares 9 (223) (217) (308)
Net cash used in financing activities - continuing operations (648) (630) (1,117)
Net (decrease)/increase in cash and cash equivalents
Continuing operations (848) (459) (556)
Discontinued operations 7 (638) 59 1,345
Total (decrease)/increase in cash and cash equivalents (1,486) (400) 789
Opening cash and cash equivalents 2,776 1,987 1,987
Closing cash and cash equivalents 1,290 1,587 2,776
Disclosed in the balance sheet:
Cash and cash equivalents 11 1,271 1,591 2,777
Overdrafts 11 (2) (4) (1)
Cash within assets held for sale 7 21 - -
*Comparative periods have been re-presented to reflect the phased exit of
Financial Services in discontinued operations. Refer to note 2 for further
details.
Notes to the Condensed Consolidated Interim Financial Statements (unaudited)
1. General information
The Condensed Consolidated Interim Financial Statements are unaudited but have
been reviewed by the auditors. Effective this financial year,
PricewaterhouseCoopers LLP (PwC) were appointed as the external auditor,
replacing Ernst & Young LLP (EY). The financial information presented
herein does not amount to statutory accounts within the meaning of Section 434
of the Companies Act 2006. The Annual Report and Financial Statements 2025
have been filed with the Registrar of Companies. EY's auditor's report on
those Financial Statements was unqualified and did not contain a statement
under Section 498(2) or (3) of the Companies Act 2006.
The financial period represents the 28 weeks to 13 September 2025 (comparative
financial period 28 weeks to
14 September 2024; prior financial year 52 weeks to 1 March 2025). The
financial information comprises the results of the Company and its
subsidiaries (the 'Group') and the Group's interests in joint ventures and
associates.
The Group's principal activities are Food, General Merchandise & Clothing
Retailing and Financial Services.
2. Basis of preparation and accounting policies
2.1 Basis of preparation
The Interim Results, comprising the Condensed Consolidated Interim Financial
Statements and the Interim Management Report, have been prepared in accordance
with the Disclosure and Transparency Rules sourcebook of the UK's Financial
Conduct Authority and with the requirements of UK adopted IAS 34 'Interim
Financial Reporting'.
The financial information contained in the Condensed Consolidated Interim
Financial Statements should be read in conjunction with the Annual Report and
Financial Statements 2025, which were prepared in accordance with UK adopted
international accounting standards in conformity with the requirements of the
Companies Act 2006. The Annual Report and Financial Statements 2025 have been
filed with the Registrar of Companies.
Sainsbury's Bank plc and its subsidiaries have been consolidated for the six
months to 31 August 2025
(14 September 2024: six months to 31 August 2024; 1 March 2025: twelve months
to 28 February 2025). No significant transactions occurred in the period from
1 September 2025 to 13 September 2025 and therefore no adjustments have been
made to reflect the difference in balance sheet dates.
The financial information has been prepared applying consistent accounting
policies to those applied by the Group for the financial year ended 1 March
2025, and expected to be applicable for the year ending 28 February 2026.
Re-presentation of comparative periods - Balance sheet line items
Comparative period amounts of the following line items within the Group
balance sheet have been re-presented, with no impact on net assets:
· Taxes payable, which was previously presented on a net basis, has been
re-presented to separately disclose Income taxes receivable and Income taxes
payable, and to present Other taxation and social security payables within
Trade and other payables. Taxes payable has been re-presented from £(141)
million to £(4) million at 1 March 2025 and from £(204) million to £nil at
14 September 2024; Trade and other payables within Current liabilities has
been re-presented from £(5,278) million to £(5,489) million at 1 March 2025
and from £(5,093) million to £(5,353) million at 14 September 2024; and
Income taxes receivable has been re-presented from £nil to £74 million at 1
March 2025 and from £nil to £56 million at 14 September 2024.
· Lease liabilities have been re-presented with £107 million of Current
liabilities as at 1 March 2025 and £40 million as at 14 September 2024
reclassified as Non-current liabilities to correct the classification of
certain balances. At 1 March 2025, Lease liabilities were previously £(590)
million within Current liabilities and £(4,904) million within Non-current
liabilities, and at 14 September 2024 Lease liabilities were previously
£(520) million within Current liabilities and £(4,912) million within
Non-current liabilities.
· The Net retirement benefit surplus has been re-presented to separately
disclose the present value of unfunded obligations of £(23) million as at 1
March 2025 and £(25) million as at 14 September 2024 as Retirement benefit
deficit, as the Group does not have the right to offset these amounts.
Comparative amounts have, therefore, been re-presented whereby the Net
retirement benefit surplus was previously £731 million and £751 million at 1
March 2025 and 14 September 2024 respectively.
Re-presentation of comparative periods - Discontinued operations and
reclassification to non-underlying
Discontinued operations were previously included in underlying measures whilst
the associated trading activities remained ongoing. Following completion of
the NatWest, NewDay, and NoteMachine disposals, these activities are
substantially ceased, and have therefore been reclassified to non-underlying
so as to only reflect ongoing trading performance within underlying results.
As a result, underlying profit after tax - discontinued operations has reduced
from £22 million to £nil for the 28 weeks to 14 September 2024 and £31
million to £nil for the 52 weeks to 1 March 2025.
In July 2025, the Group announced it had entered into an agreement to sell the
Travel Money business to Fexco Group. As a result, Travel Money assets have
been classified as held for sale and the results for the 28 weeks to 14
September 2024 and 52 weeks to 1 March 2025 have been restated to reclassify
the operations as discontinued. Following the sale of AFS cards to NewDay on
28 February 2025, results for the 28 weeks to 14 September 2024 have been
restated to reflect the AFS component as discontinued. This had already been
reflected as discontinued operations within the results for the 52 weeks to 1
March 2025, and as such no further adjustment has been made for the AFS cards
component.
As a result of the restatement for the above:
· Underlying profit after tax - continuing operations has been restated from
£230 million to £217 million for the 28 weeks to 14 September 2024, and from
£508 million to £497 million for the 52 weeks to 1 March 2025.
· Non-underlying loss after tax - continuing operations has been restated from
£(56) million to £(42) million for the 28 weeks to 14 September 2024, and
from £(88) million to £(87) million for the 52 weeks to 1 March 2025.
· Total loss after tax - discontinued operations has been restated from £(98)
million to £(99) million for the 28 weeks to 14 September 2024, and from
£(178) million to £(168) million for the 52 weeks to 1 March 2025.
2.2 Going concern
The Directors are satisfied that the Group has sufficient resources to
continue in operation for a period of at least 12 months from the date of
approval of the Condensed Consolidated Interim Financial Statements.
Accordingly, they continue to adopt the going concern basis in preparing the
financial statements. The assessment period for the purposes of considering
going concern is the 16 months to 27 February 2027.
In assessing the Group's ability to continue as a going concern, the Directors
have considered the Group's most recent corporate planning and budgeting
processes. This includes an annual review which considers profitability, the
Group's cash flows, committed funding and liquidity positions and forecasted
future funding requirements over three years, with a further year of
indicative movements.
The Group manages its financing by diversifying funding sources, for example
through the Investment Grade Corporate Bond markets and structuring core
borrowings with phased maturities to manage refinancing risk, evidenced by the
issuance in January 2025 of £550 million of Investment Grade Corporate Bonds,
split into two tranches, a £250 million tranche maturing in June 2030 and a
£300 million tranche maturing in January 2035. As at 13 September 2025, both
facilities were fully drawn. In addition, the Group has in place an
inflation-linked amortising loan with a principal of £410 million outstanding
at the reporting date.
The Group also seeks to minimise liquidity risk and maintain sufficient levels
of standby liquidity and a suitable level of undrawn additional funding
capacity via the Revolving Credit Facility. The Revolving Credit Facility of
£1,000 million comprises two £500 million tranches. Tranche A has a final
maturity of December 2029, and Tranche B has a final maturity of December
2028. As at 13 September 2025, the Revolving Credit Facility was undrawn. No
additional forms of financing are assumed in the assessment of the Group as a
going concern.
In assessing going concern, severe but plausible scenarios in relation to the
Group's principal risks have been considered by overlaying them into the
corporate plan and assessing the impact on cash flows, net debt and funding
headroom. The severe but plausible downside scenarios modelled are consistent
with those modelled at year-end except the 'Data and legal breaches and
regulatory changes scenario' which now models the risk of a potential
cyber-attack, instead of a regulatory fine. The other severe but plausible
scenarios included modelling inflationary pressures on both food and general
recession-related risks and failure to deliver planned cost savings.
In performing the above analysis, the Directors have made certain assumptions
around the availability and effectiveness of the mitigating actions available
to the Group. These include reducing any non-essential capital and operating
expenditure and pausing dividend payments.
The Group's most recent corporate planning and budgeting processes include
assumed cashflows to address climate change risks, including costs associated
with initiatives in place as part of the Plan for Better commitment which
include reducing environmental impacts and meeting customer expectations in
this area, notably through reducing packaging and reducing energy usage across
the estate. Climate-related risks do not result in any material uncertainties
affecting the Group's ability to continue as a going concern.
Previously, additional consideration was given to the credit, liquidity and
capital adequacy of the Bank given the phased withdrawal from Financial
Services and transition to a distributed model. Following the completed sales
with NatWest, NewDay and NoteMachine in the current and previous period, the
current capital position and the progress made on transition, the Directors no
longer deem this a material consideration in making an assessment over the
Group's ability to continue as a going concern.
As a consequence of the work performed, the Directors considered it
appropriate to adopt the going concern basis in preparing the Financial
Statements with no material uncertainties to disclose.
2.3 Accounting judgements and estimates
The preparation of Condensed Consolidated Interim Financial Statements
requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from these
estimates.
In preparing these Condensed Consolidated Interim Financial Statements, the
significant judgements and estimates made by management in applying the
Group's accounting policies were the same as those that applied to the
Consolidated Group Financial Statements for the year ended 1 March 2025.
2.4 New standards, interpretations and amendments adopted by the Group
Standards, interpretations and amendments effective in the current financial
period have not had a material impact on the Condensed Consolidated Interim
Financial Statements.
The Group has not applied any other standards, interpretations or amendments
that have been issued but are not yet effective. The impact of the following
is under assessment:
· IFRS 18 'Presentation and disclosure in financial statements', which will
become effective in the Consolidated Group Financial Statements for the
financial year ending 26 February 2028, subject to UK endorsement.
Other standards, interpretations and amendments issued but not yet effective
are not expected to have a material impact.
2.5 Alternative performance measures (APMs)
In the reporting of financial information, the Directors use various APMs.
These APMs should be considered in addition to, and are not intended to be a
substitute for, IFRS measurements. As they are not defined by International
Financial Reporting Standards, they may not be directly comparable with other
companies' APMs.
The Directors believe that these APMs provide additional useful information
for understanding the financial performance and health of the Group. They are
also used to enhance the comparability of information between reporting
periods (such as like-for-like sales and underlying performance measures) by
adjusting for non-recurring factors which affect IFRS measures, and to aid
users in understanding the Group's performance. Consequently, APMs are used by
the Directors and management for performance analysis, planning, reporting and
incentive setting purposes.
Non-underlying items
In order to provide shareholders with additional insight into the year-on-year
performance of the business, underlying profit measures are provided to
supplement the reported IFRS numbers and reflects how the business measures
performance internally. These adjusted measures exclude items recognised in
reported profit or loss before tax which, if included, could distort
comparability between periods. Underlying profit is not an IFRS measure and
therefore not directly comparable to other companies.
Reconciliations to IFRS measures
The income statement shows the non-underlying items excluded from reported
results to determine underlying results with a more detailed analysis of the
non-underlying items set out in note 3. Other APMs are detailed in notes A1,
A2, A3 and A4 of this report which includes further information on the
definition, purpose and reconciliation to the closest IFRS measure.
Changes to APMs
The definition of the Group's Retail like-for-like sales APM has been updated
during the period to exclude VAT. In prior periods, this measure was presented
inclusive of VAT. The revised approach provides more relevant information by
aligning more closely with amounts presented under IFRS. Accordingly, the
comparative Retail like-for-like sales APM reconciliation has been
re-presented to reflect this change.
3. Non-underlying items
28 weeks to 13 September 2025
Financial Services model Retail restructuring programmes Impairment of non-financial assets Pensions Other Total
3.1 3.2 3.3 3.4 3.5
Continuing operations Note £m £m £m £m £m £m
Cost of sales - (47) (1) - (2) (50)
Administrative expenses (2) (10) - (5) (23) (40)
Other income - - - - 6 6
Affecting operating profit (2) (57) (1) (5) (19) (84)
Net finance (costs)/income - (1) - 21 (5) 15
Affecting profit before tax - continuing operations (2) (58) (1) 16 (24) (69)
Income tax credit 6 17
Affecting profit after tax - continuing operations (52)
Affecting profit after tax - discontinued operations 7 (20)
Affecting profit for the financial period (72)
Being:
Non-financial asset impairments:
Property, plant and equipment - (6) - - - (6)
Right-of-use assets - - (1) - - (1)
- (6) (1) - - (7)
Accelerated depreciation of assets - (28) - - (9) (37)
Employee costs - (1) - - - (1)
Property closure provisions - (18) - - - (18)
Non-underlying finance (costs)/income - (1) - 21 (5) 15
Fair value movements - - - - (2) (2)
Other net costs (2) (4) - (5) (8) (19)
Affecting profit before tax - continuing operations (2) (58) (1) 16 (24) (69)
The impact of non-underlying items on Retail cash generated from operations is
presented in note A2.2.
28 weeks to 14 September 2024 (restated*)
Financial Services model Retail restructuring programmes Impairment of non-financial assets Pensions Other Total
3.1 3.2 3.3 3.4 3.5
Continuing operations Note £m £m £m £m £m £m
Cost of sales - (26) (12) - 4 (34)
Administrative expenses (10) (10) - (4) (10) (34)
Other income - - - - 5 5
Affecting operating profit (10) (36) (12) (4) (1) (63)
Net finance (costs)/income - (1) - 18 (5) 12
Affecting profit before tax - continuing operations (10) (37) (12) 14 (6) (51)
Income tax credit 6 9
Affecting profit after tax - continuing operations (42)
Affecting profit after tax - discontinued operations 7 (99)
Affecting profit for the financial period (141)
Being:
Non-financial asset impairments
Right-of-use assets - - (12) - - (12)
- - (12) - - (12)
Accelerated depreciation of assets - (25) - - (9) (34)
Employee costs (2) (5) - - - (7)
Onerous contracts (6) - - - - (6)
Profit on disposal of fixed assets - - - - 5 5
Property closure provisions - (4) - - - (4)
Non-underlying finance income/(costs) - - - 18 (5) 13
Fair value movements - - - - 3 3
Other net costs (2) (3) - (4) - (9)
Affecting profit before tax - continuing operations (10) (37) (12) 14 (6) (51)
52 weeks to 1 March 2025 (restated*)
Financial Services model Retail restructuring programmes Impairment of non-financial assets Pensions Other Total
3.1 3.2 3.3 3.4 3.5
Continuing operations Note £m £m £m £m £m £m
Cost of sales - (64) (16) - 2 (78)
Administrative expenses (16) (58) - (8) (17) (99)
Other income - (4) - - 57 53
Affecting operating profit (16) (126) (16) (8) 42 (124)
Net finance (costs)/income - (2) - 36 (12) 22
Affecting profit before tax - continuing operations (16) (128) (16) 28 30 (102)
Income tax credit 6 15
Affecting profit after tax - continuing operations (87)
Affecting profit after tax - discontinued operations 7 (168)
Affecting profit for the financial period (255)
Being:
Non-financial asset impairments
Property, plant and equipment - (4) - - - (4)
Right-of-use assets - - (16) - - (16)
- (4) (16) - - (20)
Accelerated depreciation of assets - (42) - - (17) (59)
Employee costs (7) (43) - - - (50)
Onerous contracts (8) - - - - (8)
Profit on disposal of fixed assets - - - - 57 57
Property closure provisions - (12) - - - (12)
Non-underlying finance income/(costs) - - - 36 (12) 24
Fair value movements - - - - 2 2
Other net costs (1) (27) - (8) - (36)
Affecting profit before tax - continuing operations (16) (128) (16) 28 30 (102)
*Comparative periods have been re-presented to reflect the phased exit of
Financial Services in discontinued operations and the reclassification of
discontinued operations to non-underlying. Refer to note 2 for further
details.
3.1 Financial Services model
As part of the phased withdrawal from financial services, costs incurred
associated with the exit that are directly attributable to the disposal group
have been classified as discontinued operations as set out in note 7.
Costs which are not directly attributable to the disposal group but have
specifically been incurred as part of the phased withdrawal, have been
recognised within non-underlying items within continuing operations.
3.2 Retail restructuring programme
In the year ended 6 March 2021, the Group announced a restructuring programme
to accelerate the structural integration of Sainsbury's and Argos and further
simplify the Argos business; create a new supply chain and logistics operating
model and further rationalise/repurpose the Group's supermarkets and
convenience estate. The programme also considered the Group's Store Support
Centre ways of working.
Separately, as part of our Next Level Sainsbury's strategy implementation, we
commenced a multi-year restructuring programme in the prior financial year
which will update our central management structures to support faster decision
making and drive performance at both Sainsbury's and Argos, creating fewer,
bigger roles with clearer accountabilities. As previously announced, the
programme also includes the closure of food counters, converting cafes to
expert partners, and converting remaining scratch bakeries. Costs have
continued to be incurred in the current period.
As the costs incurred facilitate future underlying cost savings, it was
considered whether it was appropriate to report these costs within underlying
profit. Whilst they arise from changes in the Group's underlying operations,
they can be separately identified, are material in size and do not relate to
ordinary in-year trading activity. In addition, the areas being closed or
restructured no longer relate to the Group's remaining underlying operations
and their exclusion provides meaningful comparison between financial years.
For accelerated depreciation of assets, the remaining useful economic lives of
corresponding sites have been reassessed to align with closure dates,
resulting in an acceleration in depreciation of these assets. The existing
depreciation of these assets (depreciation that would have been recognised
absent a closure decision) is recognised within underlying expenses, whereas
accelerated depreciation above this is recognised within non-underlying
expenses.
Property closure provisions relate to dilapidations and strip out costs on
sites that have been identified for closure, as well as business rates for
sites the Group no longer operates from which are recognised as incurred.
Other costs comprise predominantly consultancy costs.
3.3 Impairment of non-financial assets
Separate from restructuring initiatives and property-related transactions, the
Group has recognised £1 million (28 weeks ended 14 September 2024: £12
million; 52 weeks ended 1 March 2025: £16 million) of impairment in relation
to certain non-trading sites whereby rent reviews at previously impaired sites
caused an increase in the associated right-of-use assets, and, in prior
periods, sub-tenant defaults.
3.4 Pensions
Such amounts relate to the defined benefit pension scheme (the Scheme) and are
treated as non-underlying owing to the Scheme being closed to future accrual
and accordingly not forming part of ongoing operating activities.
3.5 Other
Comprises:
· Acquisition adjustments relating to the unwind of non-cash fair value
adjustments arising from the Home Retail Group acquisition.
· Non-underlying finance and fair value movements comprising £5 million (28
weeks ended 14 September 2024: £5 million; 52 weeks ended 1 March 2025: £12
million) of finance costs relating to lease interest on impaired non-trading
sites, and £2 million loss (28 weeks ended 14 September 2024: £3 million
gain; 52 weeks ended 1 March 2025: £2 million gain) within cost of sales
relating to adverse (2025: favourable) movements on long-term, fixed price
power purchase arrangements (PPAs) with independent producers. These are
classified as derivatives which are not in a hedge relationship and owing to
potentially significant fluctuations in value from external market factors are
treated as non-underlying to enable consistency between periods.
· Income recognised is in relation to a legal dispute whereby in the current
period agreements were reached and settled in relation to a legal case
involving European truck manufacturers.
· Consultancy costs in relation to corporate transaction activity.
· Property related transactions in the 52 weeks ended 1 March 2025 predominantly
relating to the profit on completion of the disposal of land associated with
the Hendon Mixed Used Development Scheme, which included the closure of the
existing supermarket and the recognition of a new supermarket asset within
property, plant and equipment.
4. Segment reporting
The Group's operating segments have been determined based on the information
regularly provided to the Chief Operating Decision Maker ("CODM"). In the
current period, it has been reassessed that the CODM is considered to be the
Group PLC Board, which use the information regularly provided to make optimal
decisions on the allocation of resources and assess performance.
Additionally in the current period, to ensure appropriate focus on both the
Sainsbury's and Argos businesses, the operating results of these two
businesses are now regularly reviewed by the CODM to make decisions about the
resources to be allocated to each. There are clear separate responsibilities
for the commercial proposition across Sainsbury's (including grocery, general
merchandise and clothing) and Argos respectively.
As such, during the current period, the CODM has been presented information
for the following operating segments:
· Retail - Sainsbury's
· Retail - Argos
· Financial Services
This differs from the prior year, whereby the CODM was presented with
information for Food; General Merchandise and Clothing; and Financial Services
respectively.
In determining the Group's reportable segments, management have considered the
economic characteristics, in particular average gross margin, similarity of
products, production processes, customers, sales methods and regulatory
environment of its two Retail segments. Given the similar economic
characteristics between them, these two segments have been aggregated into one
'Retail' segment within the financial statements as this provides users with
the financial information needed to evaluate the business and the environment
in which it operates.
The Group's reportable operating segments have therefore been identified as
follows:
· Retail; comprising the sale of food, household, general merchandise, clothing
and fuel primarily through store and online channels.
· Financial Services; comprising banking and insurance services through
Sainsbury's Bank and Argos Financial Services.
The CODM uses underlying profit before tax as the key measure of segmental
performance as it represents the ongoing trading performance with additional
insight into year-on-year performance that is more comparable over time. As
described in note 2.5, the use of underlying profit before tax aims to provide
parity and transparency between users of the financial statements and the CODM
in assessing the core performance of the business and performance of
management.
Segment results include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. Segment assets and
liabilities, including investments in associates and joint ventures, are not
disclosed because they are not reported to, or reviewed by, the CODM.
Fuel revenue comprises sales from Petrol Filling Stations (PFS) and the Ultra
Rapid Electric Vehicle charging business, (Smart Charge). In prior periods,
revenue from Smart Charge was reported within Grocery, General Merchandise
& Clothing. To better reflect the nature of these sales, Smart Charge
revenue has been reclassified to Fuel revenue. As a result, comparative
figures have been re-presented. Grocery, General Merchandise & Clothing
revenue has been re-presented from £14,868 million and £28,762 million for
the 28 weeks ended 14 September 2024 and the 52 weeks ended 1 March 2025,
respectively. Fuel revenue has been re-presented from £2,182 million and
£3,868 million for the same respective periods.
4.1 Income statement
28 weeks to 13 September 2025
Retail Financial services Group
Note £m £m £m
Continuing operations
Revenue
Grocery, General Merchandise & Clothing 15,577 - 15,577
Fuel 1,939 - 1,939
Interest receivable - 46 46
Fees and commission - 19 19
17,516 65 17,581
Underlying operating profit 504 2 506
Underlying finance income 12 - 12
Underlying finance costs (178) - (178)
Underlying profit before tax 338 2 340
Non-underlying items 3 (69)
Profit before tax - continuing operations 271
Income tax expense 6 (86)
Profit after tax - continuing operations 185
Loss after tax - discontinued operations 7 (20)
Profit after tax - total 165
28 weeks to 14 September 2024 (restated*)
Retail Financial services Group
Note £m £m £m
Continuing operations
Revenue
Grocery, General Merchandise & Clothing 14,865 - 14,865
Fuel 2,185 - 2,185
Interest receivable - 39 39
Fees and commission - 18 18
17,050 57 17,107
Underlying operating profit/(loss) 503 (29) 474
Underlying finance income 15 - 15
Underlying finance costs (180) - (180)
Underlying profit/(loss) before tax 338 (29) 309
Non-underlying items 3 (51)
Profit before tax - continuing operations 258
Income tax expense 6 (83)
Profit after tax - continuing operations 175
Loss after tax - discontinued operations 7 (99)
Profit after tax - total 76
52 weeks to 1 March 2025 (restated*)
Retail Financial services Group
Note £m £m £m
Continuing operations
Revenue
Grocery, General Merchandise & Clothing 28,754 - 28,754
Fuel 3,876 - 3,876
Interest receivable - 103 103
Fees and commission - 39 39
32,630 142 32,772
Underlying operating profit/(loss) 1,036 (22) 1,014
Underlying finance income 31 - 31
Underlying finance costs (336) - (336)
Underlying profit/(loss) before tax 731 (22) 709
Non-underlying items 3 (102)
Profit before tax - continuing operations 607
Income tax expense 6 (197)
Profit after tax - continuing operations 410
Loss after tax - discontinued operations 7 (168)
Profit after tax - total 242
*Comparative periods have been re-presented to reflect the phased exit of
Financial Services in discontinued operations and the reclassification of
discontinued operations to non-underlying. Refer to note 2 for further
details.
5. Finance income and finance costs
28 weeks to 13 September 2025 28 weeks to 14 September 2024 52 weeks to 1 March 2025
Underlying Non-underlying Total Underlying Non-underlying Total Underlying Non-underlying Total
Continuing operations £m £m £m £m £m £m £m £m £m
Finance income
Interest on bank deposits and other financial assets 11 - 11 14 - 14 29 - 29
Finance fair value movements - 1 1 - - - - - -
IAS 19 pension financing income - 21 21 - 18 18 - 36 36
Finance income on net investment in leases 1 - 1 1 - 1 2 - 2
12 22 34 15 18 33 31 36 67
Finance costs
Secured borrowings (15) - (15) (19) - (19) (35) - (35)
Unsecured borrowings (20) - (20) (22) - (22) (41) - (41)
Lease liabilities (143) (6) (149) (139) (6) (145) (260) (12) (272)
Provisions - amortisation of discount - (1) (1) - - - - (2) (2)
(178) (7) (185) (180) (6) (186) (336) (14) (350)
6. Income tax expense
28 weeks to 28 weeks to 52 weeks to
13 September 2025 14 September 2024 1 March
(restated*) 2025
(restated*)
Continuing operations £m £m £m
Current year UK tax 50 42 120
Over provision in prior years - - (34)
Total current tax expense 50 42 86
Origination and reversal of temporary differences 41 42 61
(Over)/under provision in prior years (5) (1) 54
Recognition of capital losses - - (4)
Total deferred tax expense 36 41 111
Total income tax expense 86 83 197
Analysed as:
Underlying tax 103 92 212
Non-underlying tax (17) (9) (15)
Total income tax expense 86 83 197
Underlying tax rate 30.3% 29.8% 29.9%
Effective tax rate 31.7% 32.2% 32.5%
*Comparative periods have been re-presented to reflect the phased exit of
Financial Services in discontinued operations and the reclassification of
discontinued operations to non-underlying. Refer to note 2 for further
details. Tax associated with discontinued operations is presented in note 7.
Tax charged within the 28 weeks ended 13 September 2025 has been calculated by
applying the effective rate of tax which is expected to apply to the Group for
the period ending 28 February 2026 using rates substantively enacted by 13
September 2025 as required by IAS 34 'Interim Financial Reporting'.
The effective tax rate is higher than the standard rate of corporation tax in
the UK of 25% primarily due to the impact of non-qualifying depreciation.
The Group is within the scope of global minimum tax ('GMT') under the OECD
Pillar Two rules ('Pillar Two'). Pillar Two reporting requirements were
enacted for the UK on 18 July 2023 and apply to the Group from the period
ended 1 March 2025. Under these requirements, the Group is liable to pay a top
up tax for any deficit between the minimum tax rate of 15% and the effective
tax rate per jurisdiction. As a primarily UK focused group, there is no
material impact of GMT.
Deferred tax assets have not been recognised in respect of capital losses of
£389 million (1 March 2025: £399 million; 14 September 2024: £355 million)
for which their use against chargeable capital gains is restricted. These
capital losses have no date of expiry.
7. Discontinued operations
In January 2024 the Group announced that it had completed its strategic review
of the Financial Services division, culminating in a single co-ordinated plan
to move to a third-party distributed model. Owing to the complex nature of
assets and liabilities that make up the separate major line of business, this
has resulted in a phased withdrawal with components completing at various
stages.
In the first half of the prior year, the Group announced that it had entered
into an agreement for the sale of Sainsbury's Bank plc's personal loan, credit
card and retail deposit portfolios to NatWest Group ("NatWest") and announced
the sale of its ATM estate to NoteMachine. The results of these operations
were presented as discontinued in the 28 weeks to 14 September 2024 and in
subsequent periods to the date of disposal. Subsequently in the second half,
the Group announced the sale of AFS cards to NewDay Group. Results for the 28
weeks to 14 September 2024 have been restated to reflect the AFS component as
discontinued.
In July 2025, the Group announced it had reached an agreement for the sale of
its Travel Money business to Fexco Group. The sale is expected to complete in
the second half of this year. As a result, Travel Money assets have been
classified as held for sale and results have been re-presented to reclassify
the operations as discontinued in prior periods.
The loss for these operations is set out in note 7.1. Further costs associated
with this phased withdrawal will be incurred as product migrations to
respective buyers are executed following the sales and the phased withdrawal
is completed. Loss on disposal is measured by reference to the fair value of
portfolios at the balance sheet date, or by reference to the fair value of
consideration received, as set out in note 7.2.
7.1 Discontinued operations loss after tax
28 weeks to 28 weeks to 52 weeks to
13 September 14 September 2024 1 March
2025 (restated) 2025
(restated)
Note £m £m £m
Revenue
Interest receivable - 208 273
Fees and commission income 63 55 96
63 263 369
Operating costs (68) (216) (317)
Operating (loss)/profit (5) 47 52
Restructuring and impairment costs (21) (70) (134)
Net loss arising from disposals 7.2 - (104) (141)
Loss before tax (26) (127) (223)
Income tax credit 6 28 55
Loss after tax (20) (99) (168)
7.2 Discontinued operations net loss arising from disposals
28 weeks to 28 weeks to 52 weeks to
13 September 2025 14 September 2024 1 March
2025
£m £m £m
Fair value of consideration (payable)/receivable a) (273) (536) 149
Fair value of net liabilities/(assets) disposed excluding provisions b) 273 331 (218)
Reversal of net provisions held against assets disposed - 153 -
Write down of net liabilities/loss on net assets disposed - (52) (69)
Costs of disposal - (52) (72)
Loss on disposal before tax - (104) (141)
Income tax credit - 23 35
Loss on disposal after tax - (81) (106)
a) Comprises consideration paid in relation to the Core Banking activities
disposed based on pricing mechanisms set out in the sale agreement at the
completion date of 1 May 2025. 28 weeks to 14 September 2024 and 52 weeks to 1
March 2025 comprises consideration payable on the Core Banking activities
based on pricing mechanisms set out in the sale agreement measured at the
respective reporting dates offset by £2 million related to the ATM assets. 52
weeks to 1 March 2025 includes £749 million received related to AFS cards and
the debt instrument notes derecognised.
b) 28 weeks to 13 September 2025: Comprises the fair value of assets and
liabilities of the Core Banking portfolios at the completion date of 1 May
2025. Net liabilities were remeasured to fair value immediately prior to
completion of the sale with associated fair value movements recognised within
operating costs. 28 weeks to 14 September 2024 and 52 weeks to 1 March 2025
comprises the fair value of assets and liabilities of Core Banking portfolios
held for sale, and ATM related assets. 52 weeks to 1 March 2025 also includes
AFS cards assets disposed inclusive of £24 million of goodwill.
7.3 Assets and liabilities of disposal group and non-current assets classified
as held for sale
28 weeks to 52 weeks to 28 weeks to
13 September 2025 1 March 14 September 2024
2025
Note £m £m £m
Non-current assets classified as held for sale
ATM assets - 1 2
Assets of disposal group classified as held for sale
Unsecured balances - 2,512 3,069
Cash and cash equivalents a) 21 - -
Total assets of disposal group and non-current assets classified as held for 14 21 2,513 3,071
sale
Liabilities of disposal group classified as held for sale
Customer deposits - (3,109) (3,655)
Provisions for costs of disposal - (27) -
Total liabilities of disposal group classified as held for sale 14 - (3,136) (3,655)
Net assets held for sale associated with discontinued operations 21 (623) (584)
a) 28 weeks to 13 September 2025: Represents the cash and cash equivalents
directly attributed to the travel money operations, primarily comprising
foreign currencies.
7.4 Discontinued operations cash flow statement
28 weeks to 28 weeks to 52 weeks to
13 September 2025 14 September 2024 1 March
(restated) 2025
(restated)
£m £m £m
Net cash flows from:
Operating activities (366) 59 595
Investing activities a) (272) - 750
(638) 59 1,345
a) Net cash flows used in investing activities relate to consideration paid in
respect of Core Banking activities disposed. 52 weeks to 1 March 2025: Net
cash flows generated primarily relate to proceeds received from the disposal
of AFS cards and cash receipts from the sale of a debt instrument that formed
part consideration under the arrangement.
8. Earnings per share
The calculations of basic and underlying basic earnings per share are based on
profit after tax and underlying profit after tax for the financial period,
respectively, divided by the weighted average number of Ordinary shares in
issue during the year, excluding own shares held by the Employee Share
Ownership Trust (ESOT).
Diluted and underlying diluted earnings per share are calculated on the same
basis as basic and underlying basic earnings per share, but where the weighted
average share numbers have also been adjusted for the weighted average effects
of potentially dilutive shares. Such potentially dilutive shares comprise
share options and awards granted to employees, where the scheme to date
performance is deemed to have been earned.
13 September 2025 14 September 2024 1 March 2025
million million million
Weighted average number of shares in issue for calculating basic earnings 2,291.9 2,346.3 2,330.6
per share
Weighted average number of dilutive share options 37.8 41.6 43.5
Total number of shares for calculating diluted earnings per share 2,329.7 2,387.9 2,374.1
28 weeks to 28 weeks to 52 weeks to 1 March 2025 (restated*)
13 September 2025 14 September 2024 (restated*)
£m £m £m
Underlying profit after tax attributable to ordinary shareholders of the 237 217 497
parent
Adjustment for non-underlying items after tax (52) (42) (87)
Profit after tax attributable to ordinary shareholders of the parent - 185 175 410
continuing operations
Loss after tax from discontinued operations (20) (99) (168)
Profit after tax attributable to ordinary shareholders of the parent 165 76 242
Pence per share Pence per share (restated*) Pence per share (restated*)
Basic - total 7.2 3.2 10.4
Diluted - total 7.1 3.2 10.2
Basic - discontinued operations (0.9) (4.3) (7.2)
Diluted - discontinued operations (0.8) (4.1) (7.1)
Basic - continuing operations 8.1 7.5 17.6
Diluted - continuing operations 7.9 7.3 17.3
Basic - underlying 10.3 9.2 21.3
Diluted - underlying 10.2 9.1 20.9
*Comparative periods have been re-presented to reflect the phased exit of
Financial Services in discontinued operations and the reclassification of
discontinued operations to non-underlying. Refer to note 2 for further
details.
9. Dividends
28 weeks to 28 weeks to 52 weeks to 28 weeks to 28 weeks to 52 weeks to
13 September 14 September 2024 1 March 13 September 2025 14 September 2024 1 March
2025 2025 2025
pence pence pence per share £m £m £m
per share per share
Amounts recognised as distributions to ordinary shareholders
Financial year ended 2 March 2024
- Final dividend - 9.2 9.2 - 217 217
Financial year ended 1 March 2025
- Interim dividend - - 3.9 - - 91
- Final dividend 9.7 - - 223 - -
9.7 9.2 13.1 223 217 308
Proposed interim dividend 4.1 93
Proposed special dividend 11.0 250
The proposed interim and special dividends were approved by the Board on 5
November 2025 and have not been included as a liability in these Condensed
Consolidated Interim Financial Statements.
10. Financial instruments
13 September 2025 1 March 14 September 2024
2025 (restated*)
(restated*)
£m £m £m
Measured at amortised cost
Financial assets
Cash and cash equivalents 688 1,623 1,092
Trade and other receivables 231 316 394
Amounts due from Financial Services customers and other banks - - 846
Financial liabilities
Trade and other payables (4,668) (4,560) (4,443)
Borrowings (1,092) (1,114) (1,180)
Amounts due to Financial Services customers and other deposits (138) (1,968) (1,637)
Lease liabilities (5,446) (5,494) (5,432)
Measured at fair value through other comprehensive income
Other financial assets 311 1,369 1,278
Cash and cash equivalents 25 915 30
Measured at fair value through profit or loss
Other financial assets 12 12 -
Cash and cash equivalents 558 239 469
Derivative financial instruments (6) 24 (42)
(9,525) (8,638) (8,625)
*Cash and cash equivalents measured at amortised cost has been re-presented
from £2,777 million to £1,623 million as at 1 March 2025 and from £1,591
million to £1,092 million as at 14 September 2024, to better reflect the
nature of the balances of money market funds as measured at fair value through
profit or loss of £239 million and £469 million, and other investment
securities as measured at fair value through other comprehensive income of
£915 million and £30 million, as at 1 March 2025 and 14 September 2024
respectively.
Trade and other payables have been restated from £(4,945) million to
£(4,560) million as at 1 March 2025 and from £(4,744) million to £(4,443)
million as at 14 September 2024 to exclude balances relating to employer
rights and obligations arising from employee benefits, contract liabilities,
and amounts payable in respect of taxes and social security contributions.
Trade and other receivables have been restated from £377 million to £316
million as at 1 March 2025 and from £426 million to £394 million as at 14
September 2024 to exclude balances that do not meet the definition of a
financial asset.
10.1 Fair value estimation of amounts held at amortised cost
The fair value of financial assets and liabilities are based on prices
available from the market on which the instruments are traded. Where market
values are not available, the fair values of financial assets and liabilities
have been calculated by discounting expected future cash flows at prevailing
interest rates. The fair values of cash and cash equivalents, trade
receivables, other receivables, overdrafts, trade and other payables and lease
liabilities are assumed to approximate to their book values.
13 September 2025 1 March 2025 14 September 2024
Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value
£m £m £m £m £m £m
Financial assets
Amounts due from Financial Services customers and banks - - - - 846 828
Financial liabilities
Loans due 2031 (419) (411) (447) (440) (472) (471)
Unsecured bonds (553) (555) (550) (552) - -
Term Loan - - - - (583) (575)
Tier 2 Capital (125) (139) (124) (142) (124) (141)
Amounts due to Financial Services customers and other deposits (138) (139) (1,968) (1,990) (1,637) (1,655)
The fair value of financial assets and liabilities held at amortised cost are
within Level 2 of the fair value hierarchy, with the exception of the Tier 2
Capital, where the fair value is calculated using prevailing market prices and
is therefore Level 1.
10.2 Fair value measurements recognised in the balance sheet
The following table provides an analysis of financial instruments that are
recognised at fair value, grouped into Levels 1 to 3 based on the degree to
which the fair value is observable:
· Level 1 fair value measurements are derived from quoted market prices
(unadjusted) in active markets for identical assets or liabilities at the
balance sheet date. This level includes listed equity securities and debt
instruments on public exchanges.
· Level 2 fair value measurements are derived from inputs other than quoted
prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices). The
fair value of financial instruments is determined by discounting expected cash
flows at prevailing interest rates.
· Level 3 fair value measurements are derived from valuation techniques that
include inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
13 September 2025 1 March 2025 (restated*)
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£m £m £m £m £m £m £m £m
Financial instruments at fair value through other comprehensive income
Other financial assets 99 212 - 311 1,189 180 - 1,369
Cash and cash equivalents 25 - - 25 831 84 - 915
Financial instruments at fair value through profit and loss
Other financial assets 12 - - 12 12 - - 12
Cash and cash equivalents 558 - - 558 239 - - 239
Derivative financial assets - 7 30 37 - 21 29 50
Derivative financial liabilities - (43) - (43) - (26) - (26)
14 September 2024 (restated*)
Level 1 Level 2 Level 3 Total
£m £m £m £m
Financial instruments at fair value through other comprehensive income
Other financial assets 1,218 60 - 1,278
Cash and cash equivalents 30 - - 30
Financial instruments at fair value through profit and loss
Cash and cash equivalents 469 - - 469
Derivative financial assets - 48 11 59
Derivative financial liabilities - (101) - (101)
*Financial instruments measured at fair value through other comprehensive
income have been restated to include cash and cash equivalents of £915
million and £30 million as at 1 March 2025 and 14 September 2024
respectively. Amounts relate to other investment securities using Level 1 and
Level 2 observable inputs. Financial instruments at fair value through profit
and loss have been restated to include cash and cash equivalents of £239
million and £469 million as at 1 March 2025 and 14 September 2024,
respectively. Amounts relate to money market funds using Level 1 observable
inputs.
There have been no transfers of assets between Levels 1, 2 or 3 during the
period.
10.3 Level 3 Financial assets
a) Power Purchase Agreements
The Group has entered into several long-term fixed and CPI linked price Power
Purchase Agreements with independent producers and values these agreements as
the net present value of the estimated future usage at the contracted fixed
price less the market implied forward energy price discounted at the
prevailing swap rate.
All Power Purchase Agreements are physical arrangements. Arrangements
designated in hedging relationships are classified as hedging instruments,
whereas those not designated in hedging relationships are not classified as
hedging instruments. The credit risk exposure associated with the Power
Purchase Agreements is considered immaterial.
Commodity derivative values
13 September 2025 1 March 2025 14 September 2024
£m £m £m
At beginning of financial year 29 9 9
(Charged)/credited to income statement - cost of sales (2) 2 4
Credited/(charged) to other comprehensive income 3 18 (2)
At the end of the financial period 30 29 11
b) Sensitivity of Power Purchase Agreement derivatives
The fair value of Power Purchase Agreement derivatives is sensitive to changes
in expected output volume and forward energy pricing, as illustrated in the
sensitivity analysis below:
13 September 2025
Change in output volume +/-20.0% Change in forward pricing +/-20.0%
£m £m
Not in a hedge relationship 2/(2) 6/(6)
Designated in a cash flow hedge relationship 4/(4) 30/(30)
10.4 Amounts due to Financial Services customers and other banks
13 September 2025 1 March 2025
Non-current Current Total Non-current Current Total
£m £m £m £m £m £m
Other deposits - (138) (138) (13) (1,955) (1,968)
14 September 2024
Non-current Current Total
£m £m £m
Other deposits (18) (1,619) (1,637)
Included within the other deposits balance are £47 million of deposits
obtained via deposit aggregators where the ultimate depositors are retail
customers. A further £65 million relates to deposits from wholesale
counterparties.
11. Cash and cash equivalents
11.1 Balance sheet
13 September 2025 1 March 14 September 2024
2025 (restated*)
(restated*)
£m £m £m
Cash in hand and bank balances 309 439 638
Money market funds 558 239 469
Short-term deposits 55 141 -
Other investment securities 25 915 30
Deposits at central banks 324 1,043 454
Cash and bank balances as reported in the Group balance sheet 1,271 2,777 1,591
Bank overdrafts (within current borrowings) (2) (1) (4)
Net cash and cash equivalents as reported in the Group cash flow statement 1,269 2,776 1,587
Restricted amounts included above
For insurance purposes 3 3 8
Held within the Group's Employee Share Ownership Trust - - 5
3 3 13
*Money market funds have been re-presented from £1,154 million to £239
million as at 1 March 2025 and from £499 million to £469 million as at 14
September 2024 to better reflect the nature of certain balances as other
investment securities.
11.2 Cash flow statement
28 weeks to 13 September 2025
· Trade and other receivables: Cashflows differ from the movement in the balance
sheet owing mainly to the presentation of cash flows as discontinued
operations of £42 million.
· Trade and other payables: Cashflows differ from the movement in the balance
sheet owing mainly to reclassifications to other lines in the cash flow
statement of £85 million.
52 weeks to 1 March 2025
· Amounts due from Financial Service customers and other banks: Cashflows differ
from the movement in the balance sheet owing mainly to £2,512 million
transferred to assets held for sale on the balance sheet and £2,005 million
cash inflows presented within discontinued operations in the cash flow
statement.
· Amounts due to Financial Service customers and other deposits: Cashflows
differ from the movement in the balance sheet owing mainly to £3,109 million
transferred to liabilities held for sale on the balance sheet and £644
million cash outflows presented within discontinued operations in the cash
flow statement.
· Trade and other receivables: Cashflows differ from the movement in the balance
sheet owing mainly to cash inflows presented within discontinued operations in
the cash flow statement.
· Provisions: Cashflows differ from the movement in the balance sheet owing
mainly to cash outflows presented within discontinued operations in the cash
flow statement.
28 weeks to 14 September 2024
· Amounts due from Financial Service customers and other banks: Cash flows
differ from the movement in the balance sheet owing mainly to the
reclassification of these amounts to Assets of disposal group and non-current
assets held for sale on the Balance Sheet of £3,708 million.
· Amounts due to Financial Service customers and other deposits: Cash flows
differ from the movement in the balance sheet owing mainly to the
reclassification of these amounts to Liabilities of disposal group held for
sale on the Balance Sheet of £4,164 million.
12. Notes to the cash flow statement
12.1 Reconciliation of operating profit to net cash generated from continuing
operations
28 weeks to 28 weeks to 52 weeks to 1 March 2025
13 September 14 September 2024 (restated*)
2025 (restated*)
£m £m £m
Operating profit 422 411 890
Depreciation 567 557 1,033
Amortisation 103 93 182
Net impairment loss/(reversal) on non-financial assets 7 (9) 22
Profit on sale of non-current assets and early termination of leases (2) (11) (53)
Fair value movements 2 (3) (2)
Share-based payments expense 40 39 73
Defined benefit scheme expense 5 4 8
Cash contributions to defined benefit scheme (13) (23) (45)
Operating cash flows before changes in working capital 1,131 1,058 2,108
Changes in working capital
(Increase)/decrease in inventories (79) 13 -
Decrease/(increase) in other financial assets 1,056 (499) (603)
Decrease/(Increase) in trade and other receivables 44 (26) 15
Increase in amounts due from Financial Services customers and other banks - (6) -
Increase in trade and other payables 173 174 247
(Decrease)/increase in amounts due to Financial Services customers and other (1,809) 80 -
deposits
Decrease in provisions (45) (10) (7)
Cash generated from operating activities - continuing operations 471 784 1,760
*Comparative periods have been re-presented to reflect the phased exit of
Financial Services in discontinued operations. Refer to note 2 for further
details.
12.2 Analysis of net debt
Cash Movements Non-Cash Movements
1 March 2025 Cash flows excluding interest Net interest paid Accrued Interest Other non-cash movements 13 September 2025
£m £m £m £m £m £m
Retail
Net derivative financial instruments (1) - 1 (1) 2 1
Borrowings (excluding overdrafts) (989) 28 29 (31) (2) (965)
Lease liabilities (5,494) 245 149 (149) (197) (5,446)
Arising from financing activities (6,484) 273 179 (181) (197) (6,410)
Cash and cash equivalents 727 158 - - - 885
Bank overdrafts (1) (1) - - - (2)
Retail net debt (5,758) 430 179 (181) (197) (5,527)
Financial Services
Net derivative financial instruments (2) - - - 2 -
Borrowings (excluding overdrafts) (124) - 6 (6) (1) (125)
Arising from financing activities (126) - 6 (6) 1 (125)
Other financial assets at fair value through other comprehensive income 1,369 (1,056) - - (2) 311
Cash and cash equivalents 2,050 (1,643) - - (21) 386
Financial services net funds 3,293 (2,699) 6 (6) (22) 572
Group
Net derivative financial instruments (3) - 1 (1) 4 1
Borrowings (excluding overdrafts) (1,113) 28 35 (37) (3) (1,090)
Lease liabilities (5,494) 245 149 (149) (197) (5,446)
Arising from financing activities (6,610) 273 185 (187) (196) (6,535)
Other financial assets at fair value through other comprehensive income 1,369 (1,056) - - (2) 311
Cash and cash equivalents 2,777 (1,485) - - (21) 1,271
Bank overdrafts (1) (1) - - - (2)
Group net debt (2,465) (2,269) 185 (187) (219) (4,955)
Cash Movements Non-Cash Movements
3 March 2024 Cash flows excluding interest Net interest (received)/ paid Accrued Interest Other non-cash movements 1 March 2025
£m £m £m £m £m £m
Retail
Net derivative financial instruments - - (1) - - (1)
Borrowings (excluding overdrafts) (1,077) 79 76 (67) - (989)
Lease liabilities (5,354) 487 272 (272) (627) (5,494)
Purchase of own shares for cancellation - 200 - - (200) -
Arising from financing activities (6,431) 766 347 (339) (827) (6,484)
Cash and cash equivalents 877 (150) - - - 727
Bank overdrafts - (1) - - - (1)
Less: Purchase of own shares for cancellation - (200) - - 200 -
Retail net debt (5,554) 415 347 (339) (627) (5,758)
Financial Services
Net derivative financial instruments - - - - (2) (2)
Borrowings (excluding overdrafts) (122) - 12 (12) (2) (124)
Arising from financing activities (122) - 12 (12) (4) (126)
Other financial assets at fair value through other comprehensive income 761 609 - - (1) 1,369
Cash and cash equivalents 1,110 940 - - - 2,050
Financial services net funds 1,749 1,549 12 (12) (5) 3,293
Group
Net derivative financial instruments - - (1) - (2) (3)
Borrowings (excluding overdrafts) (1,199) 79 88 (79) (2) (1,113)
Lease liabilities (5,354) 487 272 (272) (627) (5,494)
Purchase of own shares for cancellation - 200 - - (200) -
Arising from financing activities (6,553) 766 359 (351) (831) (6,610)
Other financial assets at fair value through other comprehensive income 761 609 - - (1) 1,369
Cash and cash equivalents 1,987 790 - - - 2,777
Bank overdrafts - (1) - - - (1)
Less: Purchase of own shares for cancellation - (200) - - 200 -
Group net debt (3,805) 1,964 359 (351) (632) (2,465)
Cash Movements Non-Cash Movements
3 March 2024 Cash flows excluding interest Net interest (received)/ paid Accrued Interest Other non-cash movements 14 September 2024
£m £m £m £m £m £m
Retail
Net derivative financial instruments - - (1) 1 (2) (2)
Borrowings (excluding overdrafts) (1,077) 22 38 (38) - (1,055)
Lease liabilities (5,354) 243 145 (145) (321) (5,432)
Purchase of own shares for cancellation - 136 - - (150) (14)
Arising from financing activities (6,431) 401 182 (182) (473) (6,503)
Cash and cash equivalents 877 32 - - - 909
Bank overdrafts - (4) - - - (4)
Less: Purchase of own shares for cancellation - (136) - - 150 14
Retail net debt (5,554) 293 182 (182) (323) (5,584)
Financial Services
Net derivative financial instruments - - - - 1 1
Borrowings (excluding overdrafts) (122) - 6 (6) (2) (124)
Arising from financing activities (122) - 6 (6) (1) (123)
Other financial assets at fair value through other comprehensive income 761 505 - - - 1,266
Cash and cash equivalents 1,110 (428) - - - 682
Financial services net funds 1,749 77 6 (6) (1) 1,825
Group
Net derivative financial instruments - - (1) 1 (1) (1)
Borrowings (excluding overdrafts) (1,199) 22 44 (44) (2) (1,179)
Lease liabilities (5,354) 243 145 (145) (321) (5,432)
Purchase of own shares for cancellation - 136 - - (150) (14)
Arising from financing activities (6,553) 401 188 (188) (474) (6,626)
Other financial assets at fair value through other comprehensive income 761 505 - - - 1,266
Cash and cash equivalents 1,987 (396) - - - 1,591
Bank overdrafts - (4) - - - (4)
Less: Purchase of own shares for cancellation - (136) - - 150 14
Group net debt (3,805) 370 188 (188) (324) (3,759)
Other non-cash movements relate to new leases, foreign exchange, the
cancellation of own shares once purchased, fair value adjustments relating to
derivatives, and cash and cash equivalents reclassified as assets held for
sale (refer to note 14 for further details).
12.3 Reconciliation of own shares purchased for cancellation
The table below presents the reconciliation of own shares purchased for
cancellation between the Group statement of changes in equity and the Group
cash flow statement:
13 September 2025 1 March 2025 14 September 2024
£m £m £m
Included in the Group statement of changes in equity (158) (200) (150)
Outstanding amount recognised as financial liabilities - - 14
Included in the Group cash flow statement (158) (200) (136)
13. Borrowings
13 September 2025 1 March 2025
Current Non-current Total Current Non-current Total
£m £m £m £m £m £m
Loan due 2031 70 349 419 64 383 447
Unsecured bonds 4 549 553 3 547 550
Bank overdrafts 2 - 2 1 - 1
Sainsbury's Bank Tier 2 Capital 6 119 125 6 118 124
82 1,017 1,099 74 1,048 1,122
Transaction costs (2) (5) (7) (2) (6) (8)
80 1,012 1,092 72 1,042 1,114
14 September 2024
Current Non-current Total
£m £m £m
Loan due 2031 58 414 472
Term loan 8 575 583
Bank overdrafts 4 - 4
Sainsbury's Bank Tier 2 Capital 6 118 124
76 1,107 1,183
Transaction costs (1) (2) (3)
75 1,105 1,180
13.1 Undrawn facilities
As at 13 September 2025, the Revolving Credit Facility of £1,000 million was
undrawn.
14. Assets and liabilities of disposal group and non-current assets held for
sale
As described in note 7, in July 2025, the Group announced it had entered into
an agreement to sell the Travel Money business to Fexco Group. The sale of the
Travel Money business is expected to complete in the second half of this year.
Consequently, £21 million of cash and cash equivalents held in the disposal
group have been classified as held for sale.
Non-current assets of £7 million comprise of retail related assets only.
Proceeds from disposals of non-current assets held for sale for continuing
operations have been presented within proceeds from disposal of property,
plant and equipment in the Group cash flow statement.
14.1 Assets of disposal group and non-current assets held for sale
28 weeks to 52 weeks to 28 weeks to
13 September 1 March 14 September 2024
2025 2025
£m £m £m
Opening balance 2,527 10 10
Classified as held for sale in the period 27 2,521 3,078
No longer classified as held for sale (12) - -
Sold in the period (2,514) (4) (2)
Closing balance 28 2,527 3,086
Of which
Assets of disposal group held for sale 21 2,512 3,069
Non-current assets classified as held for sale 7 15 17
28 2,527 3,086
14.2 Liabilities of disposal group held for sale
28 weeks to 52 weeks to 28 weeks to
13 September 2025 1 March 14 September 2024
2025
£m £m £m
Opening balance (3,136) - -
Classified as held for sale in the period - (3,136) (3,655)
Sold in the period 3,136 - -
Closing balance - (3,136) (3,655)
15. Retirement benefit obligations
All retirement benefit obligations relate to the Sainsbury's Pension Scheme
plus three unfunded pension liabilities relating to former senior employees of
Sainsbury's and Home Retail Group.
The Sainsbury's Pension Scheme has two segregated sections: the Sainsbury's
Section and the Argos Section.
The most recent triennial valuation was carried out as at 30 September 2021
resulting in an actuarial surplus of £130 million (comprising a surplus of
£231 million in the Sainsbury's section and a £101 million deficit in the
Argos section) on a technical provisions basis. The next triennial valuation
as at 30 September 2024 is in progress.
The unfunded pension liabilities are unwound when each former employee reaches
retirement and takes their pension from the Group payroll or is crystallised
if the employee takes the provision as a one-off cash payment.
On 25 July 2024, the Court of Appeal upheld the High Court's decision in
Virgin Media v NTL Pension Trustees. This case found that changes made between
1997 and 2016 to pension benefits from a contracted-out salary related scheme
could be void where trustees do not have written Section 37 confirmation from
the scheme actuary. In response, the UK Government announced on 5 June 2025
its intention to introduce legislation allowing schemes to retrospectively
obtain the required actuarial confirmation for those changes. Based on a
review of historical amendments and associated documentation, the Group does
not consider any adjustments to the financial statements are required in
respect of this matter.
15.1 Balance sheet
13 September 2025 1 March 2025
Sainsbury's Argos Group Sainsbury's Argos Group
£m £m £m £m £m £m
Present value of funded obligations (4,628) (723) (5,351) (4,820) (755) (5,575)
Fair value of plan assets 5,172 869 6,041 5,418 911 6,329
Net funded pension plan asset 544 146 690 598 156 754
Present value of unfunded obligations (12) (10) (22) (13) (10) (23)
Net retirement benefit surplus 532 136 668 585 146 731
Analysed in the Group balance sheet:
Retirement benefit surplus 544 146 690 598 156 754
Retirement benefit deficit (12) (10) (22) (13) (10) (23)
Net retirement benefit surplus 532 136 668 585 146 731
14 September 2024
Sainsbury's Argos Group
£m £m £m
Present value of funded obligations (5,270) (836) (6,106)
Fair value of plan assets 5,912 970 6,882
Net funded pension plan asset 642 134 776
Present value of unfunded obligations (14) (11) (25)
Net retirement benefit surplus 628 123 751
Analysed in the Group balance sheet:
Retirement benefit surplus 642 134 776
Retirement benefit deficit (14) (11) (25)
Net retirement benefit surplus 628 123 751
15.2 Movements in net surplus
28 weeks to 52 weeks to 28 weeks to
13 September 2025 1 March 14 September 2024
2025
£m £m £m
At the beginning of the financial period 731 690 690
Net interest income 21 36 18
Remeasurement (losses)/gains (93) (33) 24
Pension scheme expenses (5) (8) (4)
Contributions by employer 13 45 23
Benefits paid 1 1 -
At the end of the period 668 731 751
15.3 Valuation of plan private market assets
The Pension Scheme has circa £815 million of private market assets, split
between private debt, private equity and property. The latest audited
valuations of these assets are as at a range of dates and a roll-forward to 13
September 2025 has been performed (adjusting for cash received or paid and
applying the changes seen in relevant liquid indices) which increased the
valuation of these assets by £30 million. A 1% change in the indices used
would have caused an £8 million change in the adjustment.
15.4 Actuarial assumptions for measuring funded obligations
13 September 2025 1 March 14 September 2024
2025
% % %
Discount rate 5.85 5.45 4.80
Inflation rate - RPI 3.00 3.15 3.10
Inflation rate - CPI 2.40 2.55 2.50
Future pension increases 1.90 - 2.85 1.95 - 2.95 1.90 - 2.90
15.5 Sensitivities
The obligations are sensitive to the above assumptions as well as demographic
factors whereby the main impacts of such changes are:
Change in present value of funded obligations - increase / (decrease)
£m £m
Financial sensitivities
Discount rate +/- 0.1% (68) 69
Discount rate +/- 1.0% (627) 760
Inflation rate +/- 0.1% 48 (37)
Inflation rate +/- 1.0% 419 (391)
Inflation rate for future pension increases +/- 0.1% 30 (18)
Inflation rate for future pension increases +/- 1.0% 221 (221)
Life expectancy +/- 1 year 152 (158)
Any impact on the obligations at a future balance sheet date due to a change
in the discount rate and/or inflation assumptions would be expected to be at
least partially offset by a change in the value of hedged assets, and so any
impact on the Scheme's surplus would be smaller than indicated above.
16. Contingent liabilities
The Group has a number of contingent liabilities in respect of disposed or
exited businesses and guarantees in relation to disposed assets, which may
expose the Group to a material liability. For disposed property assets, this
could be if the current tenant and their ultimate parents become insolvent. No
historical guarantees are expected to materialise.
Along with other retailers, the Group is currently subject to claims from
current and ex-employees in the Employment Tribunal for equal pay under the
Equality Act 2010 and/or the Equal Pay Act 1970. There are currently circa
19,500 equal pay claims from circa 13,700 claimants, in which the claimants
are alleging that their work within Sainsbury's stores is or was, of equal
value to that of colleagues working in Sainsbury's distribution centres, and
that differences in terms and conditions relating to pay are not objectively
justifiable. The claimants are seeking the differential back pay based on the
higher wages in distribution centres, and the equalisation of wages and terms
and conditions on an ongoing basis. The Group believes further claims will be
served.
There are three stages in the tribunal procedure for equal pay claims of this
nature, and the claimants will need to succeed in all three. The first stage
is whether store claimants have the legal right to make the comparison with
depot workers. Following European and Supreme Court decisions in other similar
litigation, Sainsbury's has conceded this point. The second stage is the
lengthy process to determine whether any of the claimants' roles are of equal
value to their chosen comparators. A procedural timetable has now been
established for Stage 2 of the litigation, and the Group anticipates that the
Employment Tribunal will issue its judgment in respect of the second stage
during the course of 2028. This judgment is expected to be subject to appeal
proceedings.
In the event that any of the claimants succeed at the second stage, there will
be a third stage comprising further hearings, in the following years, to
consider material factor defences relating to non-discriminatory reasons for
any pay differential. Both stages will involve contested hearings and
appeals. It is not possible to predict a final date with any certainty.
If the group is unsuccessful at the end of the litigation the liability could
be material but due to the complexity and multitudinous factual and legal
uncertainties, we are not in a position to predict an outcome, quantum or
impact at this stage.
Given that the outcome of the second and third stages in the litigation
remains highly uncertain at this stage, the Group cannot make any assessment
of the likelihood nor quantum of any outcome. No provision has therefore been
recognised on the Group's balance sheet. There are substantial factual and
legal defences to these claims, and the Group intends to continue to defend
them vigorously.
Alternative performance measures (APMs)
In the reporting of financial information, the Directors use various APMs
which they believe provide additional useful information for understanding the
financial performance and financial health of the Group. These APMs should be
considered in addition to, and are not intended to be a substitute for, IFRS
measurements. As they are not defined by International Financial Reporting
Standards, they may not be directly comparable with other companies who use
similar measures.
A1 Income statement measures
A1.1 Revenue
a) Retail like-for-like sales (Closest IFRS equivalent: none)
Definition and purpose
Year-on-year growth in sales excluding VAT, excluding fuel and Financial
Services, for stores that have been open for more than one year. The
relocation of Argos stores into Sainsbury's supermarkets are classified as new
space, while the host supermarket is classified like-for-like.
The measure is used widely in the retail sector.
Reconciliation
28 weeks to 28 weeks to
13 September 2025 14 September 2024
(restated*)
Retail like-for-like (exc. Fuel, exc. VAT) 4.5% 3.5%
Underlying net new space impact 0.3% (0.2)%
Retail sales growth (exc. Fuel, exc. VAT) 4.8% 3.3%
Fuel impact (2.1)% (1.0)%
Total retail sales growth (inc. Fuel, exc. VAT) 2.7% 2.3%
*Retail like-for-like sales APM has been restated to exclude VAT. Refer to
note 2.5 for details.
A1.2 Profit
a) Retail underlying operating profit and margin (Closest IFRS equivalent:
Profit before tax)
Definition and purpose
Profit before interest and tax for the retail segment excluding non-underlying
items.
This is the lowest level at which the retail segment can be viewed from a
management perspective, with finance costs managed for the Group as a whole.
Reconciliation
28 weeks to 28 weeks to 52 weeks to
13 September 2025 14 September 2024 1 March
2025
Note £m £m £m
Retail underlying operating profit 4 504 503 1,036
Retail sales 4 17,516 17,050 32,630
Retail underlying operating margin 2.88% 2.95% 3.17%
b) Underlying profit before tax (Closest IFRS equivalent: Profit before tax)
Definition and purpose
Profit before tax excluding non-underlying items.
Provides shareholders with additional insight into the year-on-year
performance.
Reconciliation
Face of the income statement.
Non-underlying items as set out in note 3 to the consolidated condensed
interim financial statements.
c) Underlying basic and diluted earnings per share (Closest IFRS equivalent:
Basic and diluted earnings per share)
Definition and purpose
Earnings per share using underlying profit as described above.
A key measure to evaluate the performance of the business and returns
generated for investors.
Reconciliation
Note 8 to the consolidated condensed interim financial statements.
d) Retail underlying EBITDA (Closest IFRS equivalent: Profit before tax)
Definition and purpose
Retail underlying operating profit as above, before underlying depreciation,
and amortisation.
Used to review the retail segment's profit generation and the sustainability
of ongoing capital reinvestment and finance costs.
Reconciliation
28 weeks to 28 weeks to 52 weeks to
13 September 2025 14 September 2024 1 March
2025
Note £m £m £m
Retail underlying operating profit 4 504 503 1,036
Add: Retail underlying depreciation and amortisation A2.1 632 616 1,156
Retail underlying EBITDA 1,136 1,119 2,192
Retail sales 4 17,516 17,050 32,630
Retail underlying EBITDA margin 6.49% 6.56% 6.72%
e) Underlying net finance costs (Closest IFRS equivalent: Finance income less
finance costs)
Definition and purpose
Net finance costs before any non-underlying items that are recognised within
finance income / expenses.
Provides shareholders with additional insight into the underlying net finance
costs.
Reconciliation
Note 5 to the consolidated condensed interim financial statements.
f) Underlying tax rate (Closest IFRS equivalent: Effective tax rate)
Definition and purpose
Tax on underlying items, divided by underlying profit before tax.
Provides an indication of the tax rate across the Group before the impact of
non-underlying items.
Reconciliation
Non-underlying tax is analysed in note 6 to the consolidated condensed interim
financial statements.
A2 Cash flows and borrowings
A2.1 Retail cash flows (Closest IFRS equivalent: Group cash flows)
Definition and purpose
Retail cash flows identified as a separate component of Group cash flows.
Retail free cash flow: Net cash generated from retail operations, after cash
capital expenditure and including payments of lease obligations, and cash
flows from joint ventures and associates. Excludes capital injections to,
dividends from, and any other exceptional cash movements with or on behalf of
Sainsbury's Bank and its subsidiaries. This measures cash generation, working
capital efficiency and capital expenditure of the retail business.
Other retail cash flows: Individual cash flow line items segregated from Group
cash flows to allow individual Retail cash flows to be identified. This
enables management to assess the cash generated from its core retail
operations, and to assess core retail capital expenditure in the financial
year in order to review the strategic business performance.
Reconciliation
28 weeks to 13 September 2025 28 weeks to 14 September 2024 (restated*)
Retail Financial Services Group Retail Financial Services Group
£m £m £m £m £m £m
Operating profit/(loss) - continuing 423 (1) 422 436 (25) 411
Depreciation and amortisation - Underlying 632 - 632 616 - 616
- Non-underlying 38 - 38 34 - 34
670 - 670 650 - 650
Net impairment loss/(reversal) on non-financial assets - Underlying b) - - - - (21) (21)
- Non-underlying 7 - 7 12 - 12
7 - 7 12 (21) (9)
Profit on sale of non-current assets and early termination of leases - Underlying b) (2) - (2) (4) - (4)
- Non-underlying - - - (7) - (7)
(2) - (2) (11) - (11)
Fair value movements - Underlying - - - - - -
- Non-underlying 2 - 2 (4) 1 (3)
2 - 2 (4) 1 (3)
Share-based payments expense - Underlying b) 35 2 37 36 3 39
- Non-underlying 3 - 3 - - -
38 2 40 36 3 39
Defined benefit scheme expenses - Non-underlying 5 - 5 4 - 4
Cash contributions to defined benefit scheme (13) - (13) (23) - (23)
Operating cash flows before changes in working capital 1,130 1 1,131 1,100 (42) 1,058
Movements in working capital - Underlying 141 (769) (628) 179 (453) (274)
- Non-underlying (35) 3 (32) (1) 1 -
106 (766) (660) 178 (452) (274)
Cash generated from operations - continuing a) 1,236 (765) 471 1,278 (494) 784
Interest paid a) (179) (6) (185) (182) (6) (188)
Corporation tax paid a) (37) 16 (21) (22) 3 (19)
1,020 (755) 265 1,074 (497) 577
Cash flows from investing activities - continuing
Purchase of property, plant and equipment a) (361) - (361) (296) - (296)
Purchase of intangible assets a) (114) - (114) (98) - (98)
Capital expenditure (475) - (475) (394) - (394)
Initial direct costs on new leases a) (3) - (3) (34) - (34)
Proceeds from disposal of property, plant and equipment a) 1 - 1 7 - 7
Interest received a) 12 - 12 15 - 15
(465) - (465) (406) - (406)
Cash flows from financing activities - continuing
Proceeds from issuance of ordinary shares 18 - 18 20 - 20
Purchase of own shares for share schemes (12) - (12) (32) - (32)
Other share related transactions 6 - 6 (12) - (12)
Purchase of own shares for cancellation (158) - (158) (136) - (136)
Repayment of borrowings (28) - (28) (22) - (22)
Capital repayment of lease obligations a) (245) - (245) (243) - (243)
Dividends paid on ordinary shares (223) - (223) (217) - (217)
(648) - (648) (630) - (630)
Intragroup dividend 300 (300) - - - -
Net increase/(decrease) in cash and cash equivalents - continuing 207 (1,055) (848) 38 (497) (459)
Net (decrease)/increase in cash and cash equivalents - discontinued (50) (588) (638) (10) 69 59
operations
157 (1,643) (1,486) 28 (428) (400)
Items in the retail cash flow marked a) to b) reconcile to the summary cash
flow statement in the financial review as outlined in note A2.2.
52 weeks to 1 March 2025 (restated*)
Retail Financial Services Group
£m £m £m
Operating profit - continuing 822 68 890
Depreciation and amortisation - Underlying 1,156 - 1,156
- Non-underlying 59 - 59
1,215 - 1,215
Net impairment loss on non-financial assets - Underlying b) 2 - 2
- Non-underlying 20 - 20
22 - 22
Profit on sale of non-current assets and early termination of leases - Underlying b) (6) - (6)
- Non-underlying (47) - (47)
(53) - (53)
Fair value movements - Non-underlying (2) - (2)
Share-based payments expense - Underlying b) 71 2 73
Defined benefit scheme expenses - Non-underlying 8 - 8
Cash contributions to defined benefit scheme (45) - (45)
Operating cash flows before changes in working capital 2,038 70 2,108
Movements in working capital - Underlying 98 (461) (363)
- Non-underlying 105 (90) 15
203 (551) (348)
Cash generated from operations - continuing a) 2,241 (481) 1,760
Interest paid a) (347) (12) (359)
Corporation tax paid a) (89) 36 (53)
1,805 (457) 1,348
Cash flows from investing activities - continuing
Purchase of property, plant and equipment a) (617) - (617)
Purchase of intangible assets a) (208) - (208)
Capital expenditure (825) - (825)
Initial direct costs on new leases a) (34) - (34)
Proceeds from disposal of property, plant and equipment a) 45 - 45
Interest received a) 27 - 27
(787) - (787)
Cash flows from financing activities - continuing
Proceeds from issuance of ordinary shares 20 - 20
Purchase of own shares for share schemes (63) - (63)
Other share related transactions (43) - (43)
Purchase of own shares for cancellation (200) - (200)
Proceeds from borrowings 544 - 544
Repayment of borrowings (623) - (623)
Net repayment of borrowings (79) - (79)
Capital repayment of lease obligations a) (487) - (487)
Dividends paid on ordinary shares (308) - (308)
(1,117) - (1,117)
Net decrease in cash and cash equivalents - continuing (99) (457) (556)
Net (decrease)/increase in cash and cash equivalents - discontinued (52) 1,397 1,345
operations
(151) 940 789
*Comparative periods have been re-presented to reflect the phased exit of
Financial Services in discontinued operations and the reclassification of
discontinued operations to non-underlying. Refer to note 2 for further
details.
A2.2 Underlying retail cash flow movements (Closest IFRS equivalent: None)
Definition and purpose
Identifies cash movements in respect of Retail non-underlying items and also
sets out a breakdown of items included in the summary cash flow statement set
out in the Financial Review.
Reconciliation
28 weeks to 28 weeks to 52 weeks to
13 September 14 September 1 March
2025 2024 2025
£m £m £m
Cash contribution to defined benefit scheme (13) (23) (45)
Non-underlying cash movements
Retail restructuring programmes (55) (29) (71)
Other (6) - -
Operating cash flows (61) (29) (71)
Effect on retail cash generated from operations (74) (52) (116)
Sum of items marked a) and b) in note A2.1 as they appear in the Financial
Review
28 weeks to 28 weeks to 52 weeks to 1 March 2025
13 September 2025 14 September 2024
£m £m £m
Retail free cash flow a) 310 425 531
Share based payments and other b) 33 32 67
A3 Borrowings
A3.1 Net debt (Closest IFRS equivalent: Borrowings, cash, derivatives,
financial assets at FVTOCI, lease liabilities)
Definition and purpose
Net debt includes the capital injections into Sainsbury's Bank, but excludes
the net debt of Sainsbury's Bank and its subsidiaries. Financial Services'
net debt balances are excluded because they are required as part of the
business as usual operations of a bank, as opposed to specific forms of
financing for the Group. Derivatives exclude those not used to hedge
borrowings, and borrowings exclude bank overdrafts as they are disclosed
separately. Hence net debt is re-presented as Retail net debt.
This metric shows the liquidity and indebtedness of the Group and whether the
Group can cover its debt commitments.
Reconciliation
Note 12.2 to the consolidated condensed interim financial statements.
A3.2 Net debt / underlying EBITDA (Closest IFRS equivalent: none)
Definition and purpose
Net debt divided by Group underlying EBITDA based on a 52 week rolling basis.
Helps management measure the ratio of the business's debt to operational cash
flow.
Reconciliation
52 weeks to 52 weeks to 52 weeks to 1 March 2025
13 September 14 September
2025 2024
Note £m £m £m
Retail net debt 12 5,527 5,584 5,758
Group underlying EBITDA 2,218 2,163 2,222
Net debt/underlying EBITDA 2.5x 2.6x 2.6x
Group underlying EBITDA is reconciled within the fixed charge cover analysis
in note A4.2.
Comparatives are as originally reported.
A4 Other measures
A4.1 Return on capital employed (Closest IFRS equivalent: none)
Definition and purpose
Return divided by average capital employed.
Return is defined as 52 week rolling underlying operating profit.
Capital employed is defined as Group net assets excluding pension surplus,
less net debt. The average is calculated on a 14-point basis which uses the
average of 14 data points, representing the previous 13 period ends and the
opening position.
Represents the total capital that the Group has utilised in order to generate
profits. Management use this to assess the performance of the business.
Reconciliation
Net debt as set out in note 12 to the consolidated condensed interim financial
statements.
52 weeks to 52 weeks to 52 weeks to
13 September 2025 14 September 2024 1 March
2025
Note £m £m £m
Return (Group underlying operating profit) 1,046 1,019 1,066
Group net assets Balance sheet 6,393 6,613 6,651
Less: Net retirement benefit surplus 15 (668) (751) (731)
Deferred tax on pension surplus 199 253 218
Less: Retail net debt 12 5,527 5,584 5,758
Effect of in-year averaging 169 262 (42)
Capital employed 11,620 11,961 11,854
Return on capital employed 9.0% 8.5% 9.0%
Comparatives are as originally reported.
A4.2 Fixed charge cover (Closest IFRS equivalent: none)
Definition and purpose
Group underlying EBITDA divided by rent (representing capital and interest
repayments on leases) and underlying net finance costs.
All items are calculated on a 52 week rolling basis.
This helps assess the Group's ability to satisfy fixed financing expenses from
performance of the business.
Reconciliation
52 weeks to 52 weeks to 52 weeks to
13 September 14 September 1 March
2025 2024 2025
£m £m £m
Group underlying operating profit 1,046 1,019 1,066
Add: Underlying depreciation and amortisation expense 1,172 1,144 1,156
Group underlying EBITDA 2,218 2,163 2,222
Repayment of capital element of lease obligations (489) (496) (487)
Underlying finance income 28 33 31
Underlying finance costs (334) (333) (336)
Fixed charges (795) (796) (792)
Fixed charge cover 2.8x 2.7x 2.8x
Comparatives are as originally reported.
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