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Sainsburys sales rise but profit falls

Sainsbury's has released its interim results for the 28 weeks to 22 September 2018, revealing group sales of £16,884m, up 3.5%.

Retail sales (excluding fuel) increased by 1.2% and like-for-like sales (excluding fuel) rose by 0.6%.

Profit after tax stood at £144m, down 13% from £166m, reflecting further non-underlying charges relating to restructuring the firm's store management teams, Argos integration, Sainsbury’s Bank transition, and the proposed combination with Asda.

Food and general merchandise sales benefited from the hot summer as grocery sales grew by 1.2% and general merchandise sales grew 1.5%, with total food transactions up 0.6%, outperforming the market.

CEO Mike Coupe (pictured) said, “The market remains very competitive and we are transforming our business to meet rapidly changing customer needs. We have fundamentally changed how our 135,000 Sainsbury’s store managers and colleagues work and I would like to thank them for their ongoing hard work through this period.

“We have delivered a solid first half performance and profit has increased because we have delivered significant Argos synergies ahead of schedule. Sales of food and general merchandise were boosted by the hot summer, but general merchandise margins remain under pressure.'

Coupe continued, “Our strategy of offering customers a distinctive range of high quality and great value food has driven like-for-like sales growth at Sainsbury’s. Where we have invested to lower prices, volumes and transactions have increased.

“Our proposed combination with Asda will create a dynamic new player in UK retail, with the ability to further lower prices and to reduce the cost of living for millions of UK households. The Competition and Markets Authority is conducting its in-depth Phase Two review into the proposed combination and we continue to engage constructively with the CMA and Panel.”