Sainsbury's profits down as like-for-like sales fall by 1%
Sainsbury’s saw its underlying pre-tax profit decline by 10.1% to £277 million in the 28 weeks 24 September as like-for-like sales fell by 1%.
In a statement, the supermarket said pricing pressures were continuing to impact margins,
Despite the fall in sales, there was like-for-like transaction growth across all channels and general merchandise sales grew by nearly 5% as clothing sales achieved an uplift of nearly 1%.
Mike Coupe, group chief executive of Sainsbury’s, said: "Two years ago we set out our strategy to make our customers' lives easier, offering great quality and service at fair prices, serving our customers whenever and wherever they want. We have made good progress delivering this in challenging market conditions.
"We have invested in the quality of our products while reducing prices on everyday items, delivering volume growth and outperforming the market in customer service and availability.”
Sainsbury's said its full-year group underlying profit expectation remains in line with the market consensus. However, it expects second half underlying profit, excluding the impact of its newly acquired Argos chain, to be lower than in the first half, as a result of continued price investment and a step up in cost inflation in the second half.
It is planning to open 250 Argos digital stores in its supermarkets over the next three years and have 30 Argos digital stores and 200 digital collection points in supermarkets by Christmas.
Looking ahead, Coupe said: “The market remains competitive and pricing pressures continue to impact margins. The full impact of the devaluation of sterling on retail prices is as yet uncertain. However, we are well placed to navigate the external environment and remain focused on delivering our strategy.”
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