Sainsbury’s sees £151m profit fall but maintains position
Sainsbury’s has posted a dip in first-half profits after it committed to keeping lower prices during the cost-of-living crisis.
In the 28 weeks up to the 17th of September, the supermarket retailer recorded a dip of 29% to £376m in statutory pre-tax profit, however group sales saw a 4.4% increase to £16.4bn.
Sainsbury’s also saw a drop of 9% in its retail operating profit, although the supermarket said this reflected its investment in ‘value, reduced grocery and general merchandise volumes post-pandemic and higher operating costs’.
General merchandise sales also dropped by 6.1% across the first half but saw an increase of 1.2% in the second quarter, this growth was driven by favourable summer weather and seasonal products.
Simon Roberts, chief executive of J Sainsbury plc, said: “[Two years ago] we committed to improve shareholder returns by creating a simpler business and reducing costs to invest in lower prices, food innovation and maintaining colleague and customer satisfaction.”
He added: “We really get how tough it is for millions of households right now. Customers are watching every penny and every pound and we know that they are relying on us to keep food prices as low as we can. We will have invested more than £500m by March 2023 in keeping prices lower by cutting our costs faster than our competitors, meaning we have more firepower to battle inflation.”
Roberts continued: “We were the first supermarket to give our colleagues a second pay rise this year and have invested £150m to support them and drive outstanding service.”
Sainsbury’s says that trading momentum has remained strong in the first few weeks of H2 2022 and that the supermarket has continued to make volume market share gains.
The retailer expects its underlying profit before tax in the fiscal year 2022/23 to be between £630m and £690m and to generate retail free cash flow of at least £500m.