Strong sales and profit growth: Acceleration of strategy
Financial Summary
. Total sales (including VAT) up 3.7 per cent to £11,158 million (2008/09: £10,756 million)
. Total sales growth excluding fuel (including VAT) up 7.9 per cent
. Like-for-like sales growth(1) excluding fuel (including VAT) of 5.7 per cent
. Underlying profit before tax(3) up 18.5 per cent at £307 million (2008/09: £259 million(2))
. Underlying basic earnings per share(4) up 18.6 per cent to 12.1 pence (2008/09: 10.2 pence(2))
. Profit before tax of £342 million (2008/09: £258 million), up 32.6 per cent
. Basic earnings per share of 14.0 pence (2008/09: 9.8 pence), up 42.9 per cent
. Interim dividend of 4.0 pence, up 11.1 per cent (2008/09: 3.6 pence)

Operating Highlights
. Weekly transactions now over 18.5 million, up 800,000 year on year
. Customer service and availability metrics have reached record new levels
‘Supermarket of the Year’ in 2009 Retail Industry Awards
. Awarded top marks in the Consumer Focus ‘Green to the Core’ survey(5)
. Launching ‘coupon at till’ – using Nectar data for targeted savings for customers
. £432 million raised to grow space by 15 per cent in the two years to March 2011
. 10,000 new jobs to be created in the two years to March 2011

Making Sainsbury’s Great Again: Recovery to Growth
. Fifth year of consecutive like-for-like sales growth
. Continued development of food offer: quality and value central to the brand
. Strong growth in non-food: around 2.5 times the rate of food
. Further improved financial performance at Sainsbury’s Bank
. Accelerated convenience store expansion
. Over 20 per cent growth in groceries online and non-food online offer launched
. 3 per cent new space opened: on track for 15 per cent in the two years to March 2011
. Property value increases by £1 billion to £8.5 billion(6)

David Tyler, Chairman, said: “We have delivered a strong performance during the first half of the year. Sainsbury’s is responding well to the current economic environment and it has significant opportunity for continued long-term growth. Underlying profit before tax for the first half was up 18.5 per cent to £307 million. Our interim dividend is 4.0 pence per share in line with our policy to pay this at 30 per cent of the previous full year dividend.”

Justin King, Chief Executive, said: “Sainsbury’s has continued to develop its offer to provide customers with a wide product range to suit all needs and budgets. We now have over 18.5 million weekly customer transactions, 800,000 more than this time last year. Total sales (excluding fuel) for the first half were up 7.9 per cent and like-for-like sales were up 5.7 per cent(1). Tight control on operating costs is enabling further investment in the customer offer and, together with our good sales performance, has delivered further strong profit growth.

“Our strategy is now well established and has enabled us to compete successfully through challenging economic conditions. We have continued to grow market share, extended our reach through online operations and have stepped up the expansion of our convenience store network. The time is right to accelerate our growth plans and in June we raised £432 million to fund faster growth in our store estate and support our circa £2 billion capital expenditure programme in the two years to 2011. We’re on track to grow gross space 15 per cent over this time and we see potential for growth for many years to come.

“As we enter the second half we expect the economic environment to remain challenging and market growth to slow due to reduced food price inflation. We remain confident that our universal customer appeal means we are well positioned to perform in this environment. In addition, the acceleration of our strategy will deliver sustained long-term growth and value to shareholders.”