The UK’s second largest grocery chain reported underlying pre-tax profits of £690 million for the year to March 4, down 5% on the previous year.
Supermarket Sainsbury’s has revealed falling annual profits as it took a hit from soaring costs and held back price rises for shoppers – but said it is “determined to battle inflation for our customers”.
The UK’s second largest grocery chain reported underlying pre-tax profits of £690 million for the year to March 4, down 5% on the previous year, when results were also boosted by pandemic restrictions that allowed supermarkets to remain open throughout lockdowns.
The result was at the top end of previous guidance for between £630 million to £690 million as like-for-like sales excluding fuel rose 2.6% over the full year, though this was boosted by price inflation.
The group said profits for the year ahead are expected to be between £640 million and £700 million in a “still uncertain outlook for consumer spending”.
But this is higher than most analysts have forecast and the group said it has started the year with “great momentum”.
Chief executive Simon Roberts said: “We really get how tough life is for so many households right now, which is why we are absolutely determined to battle inflation for our customers.
“Our focus on value has never been greater and we have spent over £560 million keeping our prices low over the last two years.”
Mr Roberts said that two years into a strategy overhaul, the group has “focused our efforts on reducing costs right across the business, which has enabled us to make the right decisions for our colleagues and customers”.
Sainsbury’s recently revealed plans to shut two Argos depots in an overhaul that will impact 1,400 jobs, while it also announced a major restructuring of its 7,000-strong logistics operation.
“There is still much to be done and there is no doubt that the year ahead will remain challenging,” Mr Roberts said.
The figures show that comparable grocery sales rose 7.4% in the latest quarter, buoyed by rocketing food price inflation, while Argos sales jumped 9.3% in a marked turnaround in recent trading.
Food price inflation has hit the highest level for more than 45 years, at 19.1% in the year to March, according to official data, putting households under immense pressure.
But figures from Kantar this week signalled a slight easing in grocery price inflation in April, to 17.3%, from last month’s 17.5%.
