Sainsbury’s has insisted it can deliver “strong and steady growth” despite announcing its third year of profit decline.
Chief executive Mike Coupe remained bullish in the face of a 1% year-on-year fall in underlying profit before tax to £581m, with consensus estimates forecasting a similar decline next year.
And Coupe stressed that food remained “at the core” of the business in the face of suggestions that Argos was propping up flagging Sainsbury’s sales.
Group sales for Sainsbury’s were up 12.7% over the 52 weeks to 11 March 2017, which it attributed “mainly” to the Argos acquisition. Like-for-like sales were down 0.6%.
Sainsbury’s is now accelerating plans to open 250 Argos concessions six months ahead of schedule.
But Coupe stressed he was not taking his eye of the food division. “We have a resilient food business,” he said.
Coupe added that, where Argos concessions are in place, supermarket sales see an uplift of 1-2%. “When we put Argos stores in Sainsbury’s stores, we know that one plus one equals more than two,” he said.
The chief executive also remained confident in the focus on online, as supermarket sales declined by 2% and online increased by 8%. “We’ve never shied away from the fact that customer shopping habits are changing and it’s our job to adapt to those needs,” he said.
“Our grocery business is profitable and we’ve made significant investments in that. We’ve opened a dark store to increase our capacity in London, which is the most penetrated online grocery market in the world, and a picking system in our stores.”
The increased focus on speed – which prompted Sainsbury’s to trial same-day delivery and click & collect last year – had no impact on profits, he added. “It doesn’t really make much difference, it just changes the way we pick in our stores,” he said. “In fact, we offer two time slots per day so ironically that works better from an efficiency point of view.”
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