Sainsbury’s posts full year profit rise as King prepares to leave
Sainsbury’s has reported a 16.3% rise in its annual pre-tax profits although it warned that conditions in the food retail sector are likely to remain “challenging”.
In the 52 weeks to 15 March 2014, pre-tax profits increased to £898 million with underlying group sales rising 2.8% £26.4 billion. Excluding one-off items, such as a £76 million credit for VAT overpayments on the redemption of Nectar points, underlying pre-tax profits climbed by 5.3% to £798 million.
Retail sales increased by 2.7% in the year, although like-for-like sales grew by only 0.2%.
Chief executive Justin King, who is leaving the business in July after ten years, said: “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.
Never Miss a Retail Update!“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.”
During the year, Sainsbury’s saw its own-brand ranges grow at over twice the rate of branded goods with its re-launched ‘By Sainsbury’s’ range now covering over 7,000 lines. In addition, the ‘Taste the Difference’ premium range achieved double-digit growth with over £1.1 billion in annual sales.
Sales of general merchandise and clothing increased at over twice the rate of food helped by the relaunch of the Tu clothing brand last autumn.
Meanwhile, sales at the retailer’s convenience business grew by around 19% to over £1.8 billion after Sainsbury’s opened 91 new stores in the year. Sales at its online grocery business rose by 12% to reach over £1 billion.
Commenting on King’s forthcoming departure, Sainsbury’s chairman David Tyler said: “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 ten million a week to around 24 million, annual sales have grown by £10.3 billion to £26.4 billion and underlying profit before tax has trebled to £798 million. He has been a truly exceptional leader and, on behalf of all our colleagues, I thank him for his outstanding achievements.”
