- Sainsbury’s reports statutory full-year pre-tax profits of £548m
- Like-for-like sales dip 0.9% in the year
- Group sales excluding fuel dip 1.1% to £25.8bn
- Underlying pre-tax profits fall 13.8%
Sainsbury’s has swung to a statutory full-year pre-tax profit, but like-for-like sales dipped as the grocery sector continues to change “rapidly”.
The supermarket giant said statutory pre-tax profits hit £548m in the 52 weeks ending March 12, following a £72m loss the previous year.
Like-for-likes dipped 0.9% during the 12-month period, but boss Mike Coupe hailed sales volume and transaction growth as its drive to invest in quality, everyday low prices, customer service and availability bore fruit.
Retail sales excluding fuel edged up 0.4% across the year, while underlying group sales excluding fuel dipped 1.1% to £25.8bn.
Underlying pre-tax profits slipped 13.8% to £587m.
Sainsbury’s warned the grocery landscape is continuing to change “rapidly” but pledged to “continue to adapt to reflect changing customer needs”.
Coupe said: “We are making good progress against the strategy we outlined to shareholders in November 2014. We continue to outperform our main supermarket peers and maintain market share in a competitive, deflationary environment.
“Our core food business performed well, underpinned by our quality investment programme, our simpler pricing strategy and lower regular prices. We also saw strong growth in clothing and general merchandise, as well as in our convenience and online channels.”
Coupe blamed the ongoing price war and food price deflation for the impact on sales and operating margins, which decreased by 33 basis points to 2.74%.
But he insisted the grocer was “on track” to deliver £500m in cost savings by the end of 2017/18 after making operating cost savings of £225m during the 2015/16 financial year.
Coupe added: “The market is competitive, and it will remain so for the foreseeable future. We believe we have the right strategy in place and are taking the right decisions to achieve our vision to be the most trusted retailer where people love to work and shop.”
As previously reported, Sainsbury’s £1.4bn bid for Argos-owner Home Retail Group has been “unanimously” recommended by the board and the deal is expected to be completed by the third quarter.