Sainsbury’s, the UK’s third biggest supermarket, yesterday posted an 11.3 per cent rise in annual pretax profits to £543 million, exceeding analysts’ forecasts.
The supermarket’s underlying profit comes off the back of a 4.5 per cent hike in like-for-like sales, excluding fuel, in the year to March 21. Total sales grew 5.7 per cent to £20.4 billion.
While the profit growth is less than half the 28 per cent increase reported last year, it compares well with the 8.8 per cent leap in annual profits seen at market leader Tesco and the 7 per cent rise at Morrisons .
Sainsburys was expected to suffer in the recession, as middle-class shoppers switched to its cheaper rivals. However, the retailer has performed well thanks to its ability to appeal to “savvy” shoppers in the economic downturn, which has seen it expand its customer base.
In-store campaigns such as its Jamie Oliver -led ‘Feed Your Family For A Fiver’ have been well received by customers, while sales of its Basics range have soared by more than 60 per cent year on year.
Sainsbury’s chief executive Justin King said: “Fixing fundamental parts of our operation through our ‘Making Sainsbury’s Great Again’ recovery programme has placed the business in a strong position.”
“Although consumer confidence in the UK has declined during the year, our performance improved as a result of the strength of the Sainsburys brand and actions we have taken to adjust our offer to changing customer trends.”
Mr King is set to receive a near £5 million bonus this year as reward for his efforts in changing the company’s fortunes over the last five years.
The Sainsbury’s chief defended his bonus payments as the result of several years’ hard work, and pointed out that all 120,000 Sainsbury’s employees will share a bonus pot of £60 million, meaning each will receive an average of £500.
Sainsbury, which is celebrating its 140th anniversary, also announced that it was pressing ahead with plans to expand its Sainsburys Local convenience format, with 150 new stores set to open throughout the UK over the next two years.
