Half-year results at the supermarket chain Sainsbury’s have shown a 20% rise in underlying profits despite an “extremely competitive” market.
Profits for the 28 weeks to 22 September were £302m, compared with £251m in the same period last year.
The supermarket giant said it had benefited from the recent Argos takeover and the hot summer weather.
However, when a host of exceptional costs are taken into account, profits nearly halved.
These included restructuring store management teams and preparing for its merger with Asda, which is being examined by competition authorities.
On the standard measure, pre-tax profit for the 28 weeks to 22 September was £132m, compared with £220m in the same period last year.
Chief executive Mike Coupe said the grocery market was “extremely competitive”.
He told the Today programme: “It’s a pleasing set of results against a difficult market backdrop, largely driven by the acquisition synergies from the Argos business.”
Julie Palmer, partner at Begbies Traynor, said: “The purchase of Argos has been a well-crafted tactical decision to draw greater footfall into its stores and reduce cost savings measures, with 90 Argos units expected to be opened in stores this financial year.
“It has also looked to ward off the threat of the discounters by cutting its prices.
“However, there is still uncertainty around its merger with Asda, with the regulators yet to give the thumbs-up to the deal.
“That, coupled with Amazon’s acquisition of Whole Foods offering a new online competitor, [means] Sainsbury’s cannot rest on its laurels and must continue to innovate and adapt to the needs of its customers.”