Profits at Sainsbury's up 7.1%
Sainsbury's has posted a better than expected rise in profit helped by increased demand for its own-label products.
In the year ending 17 March, underlying profits grew 7.1% to £712 million which was above analysts’ forecasts of a 5% rise. Total sales increased by 5.6% to £22.3 billion with like-for-like sales growing by 2.1% excluding fuel.
Sainsbury’s noted that it had outperformed the market with an increased market share of 16.6%, the highest for almost a decade. The retailer said it had benefited from good growth in its own label ranges, with sales of the premium Taste the Difference products up 8.2% and sales of basics up 6.8%
In addition, Sainsbury’s saw growth in sales of general merchandise and clothing which continued to grow faster than its food business, gaining market share. Online sales increased by 20% to £800 million.
The retailer opened 1.4 million sq ft of gross space in the year, adding 19 new supermarkets, 73 convenience stores and 28 store extensions.
CEO Justin King said: "We are succeeding by understanding what our customers want, supporting and inspiring them to Live Well For Less … Brand Match, combined with our use of coupon-at-till, has improved Sainsbury's price perception whilst retaining the benefits of our heritage in quality and service."
Regarding the outlook King added: "Whilst the wider economic situation remains uncertain, we remain confident that our clear strategy, market insight and strong values will enable us to make further progress both in our core food and non-food businesses, as well as new channels and services in the year ahead."
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