Sainsbury’s first half profits down 15%
Sainsbury’s has posted a 15% drop in first half pre-tax profit following a phasing of cost savings, higher marketing costs and tough weather comparatives in the period.
In a statement, the owner of the Sainsbury’s supermarket and Argos chain said underlying pre-tax profit fell to £238 million from £279 million in the 28 weeks to 21 September.
Group sales also declined, edging down 0.2% to £16.86 billion as like-for-like sales dropped by 1%.
Despite the sales fall, the company said customer satisfaction scores increased by more than three percentage points in the half year.
Mike Coupe, Sainsbury’s chief executive, said: “We have lowered prices on everyday food and groceries, launched a range of value brands and are more competitive on price than we have ever been. We are investing in hundreds of Sainsbury’s and Argos stores, introducing new products and services and continually improving service and availability. As a result, customer satisfaction has increased significantly year-on-year.”
Sainsbury’s made improvements to 172 supermarkets and 158 convenience stores in the first half. It also converted 176 Argos stores to its digital format and plans to convert most of the remaining shops by the end of the year. In addition, the company is working to bring Sainsbury’s and Argos closer together.
Coupe added: “We have set out our plan to create one multi brand, multichannel business. This will make the combined Sainsbury’s and Argos offer much more accessible for customers and gives us the opportunity to make our business more efficient.”
Looking ahead, the company said it expects profits in the second half to benefit from the annualisation of last year’s staff wage increase and a “normalisation” of marketing costs and weather comparatives.
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