Sainsbury's, Britain's second-largest supermarket group, on Tuesday joined industry leader Tesco in reporting slower underlying sales growth in its first quarter, but left its full-year profit guidance unchanged.
The Middle East conflict has pushed up energy prices, weighing on consumer confidence and spending, and adding to the challenges facing the UK retail sector and wider economy.
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 the 3.1% achieved in the previous quarter.
Grocery sales rose 3.6%, while general merchandise and clothing sales fell 3.7% and sales at Argos fell 0.5%.
The group was up against a strong 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.
Analysts at Bernstein said Sainsbury's reported "an overall encouraging set of results with continued strength in grocery and better than feared Argos performance."
Earlier this month, Tesco reported first quarter like-for-like sales growth 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.
Simon Roberts, Chief Executive of J Sainsbury plc, said: “Customers are looking for value now more than ever. We are consistently delivering outstanding quality at great value, so more people are choosing Sainsbury’s for their big weekly shop. This has driven an encouraging start to the year with continued volume growth and market outperformance.
“We’ve kept our strong focus on value, with the biggest Aldi Price Match in the market, across supermarkets and convenience stores, and Nectar Prices on around 11,000 products. Leading product innovation and outstanding quality fresh food set our offer apart, with standout performances in summer favourites like berries, barbecue and deli.
"And we're achieving record customer satisfaction scores on availability in supermarkets and complete orders in Groceries Online, reflecting strong operational momentum.
"This combination is really delivering at the big customer moments and we outperformed the market at Mother's Day, Eid al Fitr, Easter and the May heatwave.
“As customers make more considered food choices, we’re going further to make healthy everyday essentials more accessible and affordable, starting with fibre, fruit and veg. From new products and reformulation to clear Full on Fibre labelling on over 500 products, we’re making it easier for families to choose healthier options."
The group kept its forecast for full-year 2026/27 total underlying operating profit of between £975 million and £1.075 billion. It made £1.025 billion in 2025/26.