Sainsbury’s announced an 18 per cent fall in profits in 2017/18, despite increased grocery sales, after confirming their merger with Asda today.
The company brought forward the release date of their financial results by two days, posting £409m pre-tax profits, down on last year’s £503m, after restructuring their business model and its purchase of Argos.
Total like-for-like sales rose by 1.3 per cent, with food one of the strongest performers, increasing sales by 2.3 per cent in the grocery department, and online sales up nearly 8 per cent.
The retailer closed down 15 underperforming supermarkets last year, while opening three new stores, and 24 convenience outlets.
Sainsbury’s boss, Mike Coupe, said more customers were shopping at Sainsbury’s than ever, with the company’s underlying profit improving, despite a drop in statutory margins.
“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,” said Coupe.
“We are focused on making Sainsbury’s a destination of choice. We are clearly differentiated by the quality of our food and we have recently invested a further £150 million to lower prices. 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 continue to find ways to simplify our business and reduce costs. We have exceeded our original three year £500 million target and delivered a total of £540 million in savings. In addition, we will deliver at least £500 million of cost savings over the next three years to 2020/21.”
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