Sainsbury's (SBRY.L), Britain's second largest supermarket group after Tesco (TSCO.L), on Thursday reported a 7.2% rise in annual profit but forecast little or no growth in its new financial year as it faces a step up in competition.
Prior to the update, analysts had on average been forecasting 1.08 billion pounds for 2025/26.
"We are committed, above all else, to sustaining the strong competitive position we have built," CEO Simon Roberts said.
The group expected to continue to grow grocery volumes ahead of the market, and had started the year with "good trading momentum", it said.
Last month Asda, the UK's number three player, flagged the start of a potential price war, saying it would take a hit to profits to finance price cuts aimed at reversing a slide in its market share.
Sainsbury's, whose shares have fallen 9% so far this year, said retail sales rose 3.1% in 2024/25 to 31.6 billion pounds, with robust food sales offseting weakness in general merchandise.
Fourth-quarter like-for-like retail sales rose 3.7%, having been up 2.8% in the third quarter.
Sainsbury's has won market share thanks to a strategy of matching discounter Aldi's prices on key items and providing better prices for members of its Nectar loyalty scheme, financed by cutting costs.
It says it has also improved the quality and innovation of its products and its customer service.
It plans to buy back at least 200 million pounds of shares in 2025/26 and also return proceeds of 250 million pounds from the disposal of its bank via a special dividend.
($1 = 0.7571 pounds)
