Supermarket chain Sainsbury’s saw profits slump in the six months ended 17 September as cost of living pressures offset slightly improved revenues.
Sainsbury’s said on Thursday that statutory pre-tax profits had sunk 29% year-on-year to £376.0m, despite reporting a 4.4% increase in interim group revenues. Earnings per share fell 27% to 12.3p.
The FTSE 100-listed group said grocery sales were up 0.2% year-on-year and statutory group sales were 4.4% higher, excluding VAT, while general merchandise sales were 6.1% lower and retain operating profit was down 9%.
Sainsbury’s reported a net funds balance of £361.0m, with retail cash flow up 37% at £759.0m, and stated it will invest more than £500.0m by March 2023 as part of an effort to keep prices lower amid the ongoing cost of living crisis by cutting costs at a faster rate than competitors.
Chief executive Simon Roberts said: “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 £500.0m by March 2023 in keeping prices lower by cutting our costs at a faster rate than our competitors, meaning we have more firepower to battle inflation.
“Over the past year and a half we have consistently passed on less price inflation than our competitors and I am confident we have never been better value. Argos is also performing well in a market where customers are looking for reassurance that they are getting great value and availability.”
Sainsbury’s full-year guidance was also unchanged, with the group expecting to see underlying pre-tax profits of £630.0m to £690.0m.
Reporting by Iain Gilbert at Sharecast.com
