Sainsbury’s unveils drop in profits despite growth in food
Sainsbury’s has seen underlying profit before tax drop by 9% to £251 million in its latest interim results for the 28 weeks to 23rd September, despite group sales jumping 17% to £16,310 million.
According to the retailer, the fall in profits reflected “previously guided price investment, wage cost inflation and consolidation of Argos H1 losses, partly offset by synergies and cost savings”.
The retailer also saw “positive momentum across the business”, with 70 “new and improved” food ranges, exceeding its cost saving target and will now deliver £540 million over three years, ending 2017/18.
Online groceries also marked a 7.2% growth, along with Convenience that was up 8.2%.
Commenting on the results, Mike Coupe, group chief executive of J Sainsbury plc, noted that the supermarket chain is “adapting to meet customers’ changing shopping habits and, as a result, we are seeing positive momentum across the business”.
“This half we have updated and improved 70 of our food ranges, covering around 40% of our food sales; improved our offer across 15% of our supermarket space and opened a further 73 Argos stores in Sainsbury’s, giving customers more reasons to shop at Sainsbury’s,” he added.
He also highlighted that the retailer is collaborating with suppliers to reduce costs and “limit the impact of price inflation” on customers.
He stated: “Both Groceries Online and Convenience sales grew strongly, up by over seven per cent and over eight per cent respectively.”