The third-biggest of the
King again said Sainsbury's would not be dragged into the outright price war engulfing its rivals, but said the company would remain competitive using its brand match programme, which gives customers vouchers to cover any difference in prices of branded goods they paid for at Sainsbury's that were cheaper at Tesco.
Sainsbury's pretax profit rose 16% to
However, like-for-like sales including VAT and excluding fuel grew just 0.2% including contributions from store extensions, and were flat excluding them. That was a marked slowdown on recent years. Growth was 1.8% in the year to
"Like-for-likes are running out of steam, and profitability might well have peaked for the medium term at least. The domino effect of the near
"Of course we will match our competitors toe to toe, but we will do that through brand match...In the end that is what the strength of this brand is built on," CEO King said.
Sainsbury's said that conditions in the retail food sector are likely to remain challenging for the foreseeable future, but reiterated that it is still confident in outperforming peers in the year ahead.
The group said it maintained market share at 16.8% last year, compared with Tesco's 30% market share.
King has led Sainsbury for 10 years, turning it from a declining giant to one that is challenging Asda as the
"Under his leadership, customer transactions have increased by ten million a week to around 24 million, annual sales have grown by
Sainsbury's shares initially rose Wednesday, as investors cheered the better-than-expected profit. However, the stock reversed the early gains, becoming one of the biggest fallers on the
The stock was down 3.2% at
The company has become known for the quality of its own-brand offering rather than trying to be the cheapest of the
King said that
Sainsbury's said its online business grew by more than 12% during the year, achieving over
Sainsbury's now has more convenience stores operating than supermarkets, and says it thinks convenience is still a big growth opportunity going forward. It expects to open two of the stores a week in the current financial year.
Sainsbury's said it will be spending less money on new supermarkets, and will pump more money around the business into store refits, refurbishments, and its convenience store business. Last year it spent
It proposed a full year dividend of
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