Sainsbury’s profits jump 6.6%
09 November 2011 12:40
Sainsbury's has reported another strong set of trading figures, with the supermarket giant crediting the success of its efforts to help cash-strapped customers as a major factor in the 6.6% jump in pre-tax profits to £354 million.
In the 28 weeks to October 1st, total sales at Sainsbury's increased to £12.8 billion, up from £11.9 billion in the comparable period last year, with like-for-like sales up 1.9%. The company said that it had made £50 million in cost savings, which broadly offset inflationary pressures in the commodities markets, and had seen its weekly transactions increase by one million on last year, to nearly 22 million. Over the same period Sainsbury's launched its 'Live Well For Less' and its 'Sainsbury's Brand Match' price match campaign - the latter a head-to-head coupon-based price challenge with rivals Tesco and Asda.
David Tyler, chairman, said: "We are pleased with our sales and profit performance, given the challenging economic environment. We have continued to make good progress against our five areas of focus, strengthening our position for the long-term, particularly the investment in our food and clothing ranges as well as new channels and services. Our interim dividend is 4.5 pence, which is in line with our policy to pay this at 30 per cent of the previous year's full-year dividend."
Justin King, chief executive, said: "Our further good sales growth reflects our continued hard work to help our customers cope with the tough economic environment. They are recognising the efforts we are making to help them manage their budgets and to 'Live Well For Less'. This is reflected in customer visits, with transactions up almost one million on last year, to nearly 22 million a week. We continue to apply a tight control on costs, achieving £50 million savings so far this year. Combined with our strong sales this has helped us to grow profits, with underlying operating profit up seven per cent.
"We were proud to announce our ambitious '20 by 20 Sustainability Plan' in October, to help our customers 'Live Well' and also to transform the way we do business. We also recently launched 'Sainsbury's Brand Match' which has helped bring 'Live Well for Less' to life. We are delighted with the response from customers.
"The launch of 'Gok for TU' clothing has also been well received and has added to the continued sales growth of general merchandise and clothing. We opened our 400th convenience store and we now serve over 135,000 customers every week online.
"We have also made good progress in the development of our store estate. We have added a gross 596,000 sq ft of new space, with seven new stores (including two replacements), 15 extensions and 37 convenience stores, creating over 2,700 new jobs in the process. We were delighted that the achievements of our colleagues were recognised at the 2011 Retail Industry Awards when Sainsbury's was named Supermarket of the Year and Convenience Retailer of the Year.
"We expect the economic environment to remain challenging for the foreseeable future but we are confident of further good progress in the Christmas period ahead and our ability to grow by continuing to do a great job in helping our customers 'Live Well For Less'.
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