Sainsbury’s has announced a fall of 14% in underlying yearly profits in its trading update, but saw a turnaround in pre-tax profits, which were up by £620m.
The supermarket giant made £587m in the year ending 12 March, down from £681m in the previous year. But it recorded a £548m pre-tax profit, after a £72m loss for 2014-2015 when it was forced to record a £628m writedown in the value of its property, as well as pay other charges.
Sainsbury’s said it had suffered from fierce competition in UK supermarkets, as shoppers turn to discounters such as Aldi and Lidl. In response, it said that in partnership with Dansk Supermarked, it has opened 15 Netto stores.
Like-for-like (LFL) sales fell 0.9%, while Sainsbury’s total sales, excluding VAT and petrol, dropped to £23.5bn from £23.8bn a year earlier.
The update also mentioned the sugar debate. It said: “We anticipate that we will remove a total of 80.3 tonnes of sugar from our customers’ baskets per year, equivalent to 321 million calories.”
The UK food retail landscape was described as “changing rapidly” and the update said grocery retailers “will need to invest in customer insight tools to anticipate and better serve changing customer needs”.
Mike Coupe, chief executive of Sainsbury’s, said: "We are making good progress against the strategy we outlined to shareholders in November 2014. We continue to outperform our main supermarket peers and maintain market share in a competitive, deflationary environment.