Sainsbury’s has released preliminary results for the 52 weeks to 9 March 2019 showing profits up 7.8% to £635m, driven by solid food performance.
However, full year like-for-like sales stood at 0.2%, with grocery sales up by 0.6% and total retail sales up by 0.4%. Retail underlying operating profit was up by 10.7% to £692m.
Statutory profit after tax of £219m, down from £309m, due to non-underlying charges relating to legislation on Guaranteed Minimum Pensions; retail restructuring; Sainsbury’s Bank transition; Asda transaction and Argos integration.
£4.7bn of the firm's sales start online and it's accelerating investment in technology:
> Rolled out SmartShop self-scan to over 100 supermarkets
> Pay@Browse available in 162 Argos stores enabling customers to pay without queuing
> Trialling digital Nectar in Wales ahead of a broader roll-out later in the year
> Trialling the UK’s first checkout-free Grocery store
Other key points: Customers continue to rate Sainsbury’s first for food quality and outperformed the market in premium categories; Argos stores inside Sainsbury’s supermarkets helped supermarket sales grow 1% this year; the group accelerated investment in its store estate, including investing in over 400 supermarkets this year.
Mike Coupe, Group Chief Executive of J Sainsbury plc, said, “I am pleased to report that we have increased profits, reduced net debt and increased the dividend. This is testament to the hard work of colleagues across the business and I would like to thank them for their commitment during this year of change.
“We completed the integration of Argos that we set out in 2016, delivering £160 million in synergies ahead of schedule. We completed a major transformation of how we run Sainsbury’s stores and have made significant improvements to store standards in recent months, which remain a focus. Customers continue to rate us top for quality food and we are growing our premium ranges. We are also focused on reducing costs so that we can invest to make commodity products better value for our customers.
“We will increase and accelerate investment in the core business, investing to improve over 400 supermarkets this year. £4.7 billion of our revenue now comes from our online businesses and we are increasing investment in technology to make shopping across Sainsbury’s, Argos and Sainsbury’s Bank as quick and convenient as possible. We will also continue to strengthen our balance sheet and are making a new commitment to reduce net debt by at least £600 million over the next three years.
“I am confident in our strategy and also clear on what we need to do to continue to evolve the business in a highly competitive market where shopping habits continue to change.”
Retail markets are highly competitive and very promotional and the consumer outlook continues to be uncertain. However, the group stated it is well placed to navigate the external environment and remain focused on delivering its strategy.