Sainsbury’s warns of impact of cost of living crisis
Sainsbury’s has posted a 104% increase in its underlying pre-tax profit to £730 million in the year to 5 March, but has warned that the cost of living crisis will impact the outcome of its current financial year.
While group revenue rose by 2.9% to £29.9 billion in the period, grocery sales were broadly flat year-on-year and up 7.6% on pre-pandemic levels. However, general merchandise sales declined by 11.9% year-on-year.
Meanwhile, statutory pre-tax profit came in at £854 million versus a loss of £164 million in the prior 12-month period.
Simon Roberts, chief executive of J Sainsbury, said: “In a year of unprecedented change we have been relentlessly focused on putting customers and colleagues first while delivering the first year of our plan to put food back at the heart of Sainsbury’s.
“We said we would invest in value, innovation and service and that’s exactly what we’re doing. We have outperformed key competitors on both a one and two-year basis while also delivering strong underlying profit growth, improved returns and consistent retail free cash flow. This gives us a strong foundation to keep building momentum in the year ahead.”
The supermarket said it has started the new financial year in a good position, but warned that the year ahead will be hit by higher operating cost inflation and the impact of cost of living pressures on customers’ disposable incomes. It now expects underlying pre-tax profit to come in at between £630 million and £690 million, which is down on the previous year.
Sainsbury’s added: “We are determined to continue our consistent improvement in grocery value, innovation and customer service, funded by our comprehensive cost savings programme and we expect to continue our strong grocery volume market share performance.”
