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Sainsbury's posts uplift in underlying profit

Sainsbury’s has increased its full year pre-tax underlying profit by 1.4% to £589 million.

FOOD & DRINK

Sainsbury's posts uplift in underlying profit

Sainsbury’s has increased its full year pre-tax underlying profit by 1.4% to £589 million.

In the year to 10 March, total sales rose by 9% to £31.74 billion while group like-for-like sales, which include those of Argos, edged up 1.3%.

Mike Coupe, group chief executive of J Sainsbury, said: "We have accelerated the rate of change and innovation across the group and more customers are choosing to shop with us than ever before as a result. I am pleased to announce an increase in underlying profits before tax to £589 million, driven by delivery of Argos synergies, efficiency savings across the group and improving food margin trends.”

Grocery sales rose by 2.3% in the period. The company said its convenience business and online grocery site continue to be strong drivers of growth, with respective sales uplifts in the period of nearly 8% and 7%.

General merchandise sales, including Argos, declined by 0.8% although Sainsbury’s said sales in the category outperformed a challenging market.

In the 18 months since it acquired Argos, Sainsbury’s has been integrating the two businesses. It has now opened 191 Argos stores in Sainsbury's supermarkets and expects to open around 90 more in the next financial year, bringing the total to around 280.

Coupe added: "General merchandise and clothing are both performing ahead of the market and, in response to great customer feedback and financial returns, we are opening Argos stores in our supermarkets faster than we originally planned. We will also deliver £160 million EBITDA synergies by March 2019, six months ahead of plan.”

Sainsbury’s has also announced that it has agreed terms with Walmart for a potential merger with the Asda supermarket chain.

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