Sainsbury’s has posted a 5.3% increase in pre-tax profits to £798m for the year to 15 March.
In what it described as a “tough retail environment”, group sales rose 2.8% to £23.9bn, although like-for-like sales only grew by 0.2%.
The chain said sales in its convenience stores rose 19% to more than £1.8bn with around six million customer transactions a week, while its online groceries business saw sales climb 12% to more than £1bn.
“We remain confident that our differentiated offer, supported by the ‘value of values’, Nectar data and Brand Match, will allow us to outperform our peers in the year ahead”
Justin King
It also said its own-label ranges were growing at over twice the rate of branded products, in terms of both sales and volumes, with 97% of its customers buying products from its core By Sainsbury’s range. Its premium offer Taste the Difference reported double-digit growth for the year with sales of more than £1.1bn. However, it admitted sales of its value offer Basics declined during the year.
Non-food sales, meanwhile, grew at more than twice the rate of food. Sales of its clothing range TU hit £750m and general merchandise sales were over £1bn.
Sainsbury’s said it opened 13 supermarkets and 91 c-stores during the year – one million sq ft of additional space – giving it 611 c-stores and 592 supermarkets.
In a nod to the recent supermarket price war, Sainsbury’s said: “Despite high levels of promotional activity across the sector, Brand Match continues to reinforce the competitiveness of our price position.
“Nectar gives us a key competitive advantage, and in conjunction with coupon-at-till technology, enables us to offer our customers truly targeted offers on products that they want to buy and to incentivise multi-channel shopping.”
Competitive environment
In his last full-year results as chief executive, CEO Justin King said: “In a competitive retail environment we have focused on delivering high quality, affordable own-brand products across all our channels, helping customers to Live Well for Less.
“While the general economic outlook is showing some signs of improvement, conditions in the food retail sector are likely to remain challenging for the foreseeable future as customers continue to spend cautiously. We remain committed to investing for the future and continue to see significant opportunities for growth. We remain confident that our differentiated offer, supported by the ‘value of values’, Nectar data and Brand Match, will allow us to outperform our peers in the year ahead,” King said.
“Operationally, the business is in good shape, with a decent exposure to the c-store and online sweet spots”
Bryan Roberts, Kantar Retail
And on his forthcoming departure, he added: “After 10 wonderful years at Sainsbury’s, I will leave the business at our agm in July and will hand over to Mike Coupe, our group commercial director. I am delighted that Mike will lead Sainsbury’s on the next phase of its journey. Mike played an instrumental role in our ‘Making Sainsbury’s Great Again’ plan and is ideally equipped to lead Sainsbury’s as the company continues to develop and grow in tune with the changing consumer and industry environment.”
Sainsbury’s chairman David Tyler added: “His ‘Making Sainsbury’s Great Again’ plan transformed our business and has seen Sainsbury’s consistently outperform the growth of the market.
“Under his leadership, customer transactions have increased by 10 million a week to around 24 million, annual sales have grown by £10.3bn to £26.4bn and underlying profit before tax has trebled to £798m. He has been a truly exceptional leader and, on behalf of all our colleagues, I thank him for his outstanding achievements.”
Bryan Roberts, retail insights director at Kantar Retail, said King was leaving Sainsbury’s in ”relatively fine fettle”: “Operationally, the business is in good shape, with a decent exposure to the c-store and online sweet spots as well as a robust performance from the main estate, helped by strong product, execution, availability and Brand Match.
”However, like-for-likes are running out of steam, and profitability might well have peaked for the medium term at least.”
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