LONDON, June 30 (Reuters) – Sainsbury’s (SBRY.L), Britain’s second-largest supermarket group, on Tuesday joined industry leader Tesco (TSCO.L), in reporting slower underlying sales growth in its first quarter, though it left its full-year profit guidance unchanged.
The impact of the Middle East conflict on energy prices, with knock-on effects on consumer sentiment and spending, is adding to the challenges the UK retail sector and the wider economy are facing.
Sainsbury’s which has a UK grocery market share of 15.3%, said like-for-like sales, excluding fuel, rose 2.1% in the 16 weeks to June 20 – below analysts’ consensus forecast for growth of 2.7% and the 3.1% achieved in the previous quarter.
Sainsbury’s was up against a tough comparative performance in the first quarter last year when like-for-like sales rose 4.7%, boosted by favourable weather and cyberattack-related disruption at competitors Marks & Spencer <MKS.L and the Co-op .
Earlier this month, Tesco reported first quarter like-for-like sales slowed to 1.8%.
About one quarter of Sainsbury’s sales are non-food, making it more exposed than Tesco to any slowdown in discretionary spending.
“We have had an encouraging start to the year but the impact of the conflict in the Middle East on our customers and our business remains uncertain,” Sainsbury’s said.
It kept its forecast for full year 2026/27 total underlying operating profit of between £975 million and £1.075 billion ($1.29-$1.42 billion). It made £1.025 billion in 2025/26.
Prior to Tuesday’s updates analysts were on average forecasting £1.061 billion for 2026/27.
Shares in Sainsbury’s have increased 14% over the last year.
Reporting by James Davey; editing by Sarah Young.
