Sainsbury’s profits squeezed after cost of ‘keeping prices low’
Sainsbury’s has posted a decline in full year profit after it invested £560 million in cutting prices during the cost of living crisis.
In the year to 4 March, underlying pre-tax profit dropped by 5% to £690 million, which was at the top end of a £630 million to £690 million guidance range. Sainsbury’s said the fall was partly a result of investment in the customer proposition and operating cost inflation.
On a statutory basis, pre-tax profit came in at £327 million compared to £854 million in the prior year.
Meanwhile group sales increased by 5.4% to £35.15 billion.
Simon Roberts, chief executive of J Sainsbury plc, 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. As a result, we are now the best value compared to our competitors that we have been in many years and we are delivering improved market share performance in Sainsbury’s and Argos.”
Looking ahead to the outcome of the new financial year, Sainsbury’s said it expects underlying pre-tax profit to be between £640 million and £700 million.
Roberts added: “While there is still much to be done and there is no doubt that the year ahead will remain challenging, I’m confident we will continue to deliver for our customers, colleagues, communities and shareholder.”