Sainsbury's rises out of the gloom

Supermarket giant Sainsbury's today shrugged off the wider retail gloom to post a 13.3 per cent hike in half-year profits.

Buoyed by its 15th quarter of sales growth in a row, the company reported underlying pre-tax profits of £272 million in the six months to 4 October.

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It hailed its "universal customer appeal" as it said sales rose 3.9 per cent on a like-for-like basis in the period.

The group said it was having to adapt quickly to significant changes in customer shopping patterns as consumers tightened belts amid the economic downturn.

Sainsbury's has boosted it "basics" range, while it is also seeing an increase in its takeaway meals as cash-strapped shoppers choose to eat at home instead of dining out.

The group said more than half of its 18 million customers a week bought both basics and premium products as they traded up and down where needed to get the best value.

It is also accelerating plans to grow its convenience store operation, where it believes there is "significant potential".

Sainsbury's is planning 50 new convenience stores in 2009/10 and another 100 the following year.

Justin King, chief executive of Sainsbury's, said: "Our universal customer appeal has been fundamental to our sustained performance.

"Sainsbury's is catering for and appealing to the full range of customer needs and budgets."

The retailer's reported pre-tax profits, including exceptional and property-related items, rose 11.2 per cent to £258 million.

Its like-for-like sales boost excluded fuel, while comparable sales including fuel rose by 7.4 per cent.

The underlying profits were better than expected in the market and come after a period of intense competition between the UK's biggest grocers.

Sainsbury's said it was holding its own against rivals positioned "single mindedly on price".