UK supermarket chain J Sainsbury Plc reported annual profit that beat estimates, as the company outperformed peers in a market blighted by deflation and discount competition.
Operating profit fell 11 per cent to £700 million ($1.02 billion) in the 52 weeks ended 12 March, the country’s second-biggest grocer said in a recent statement. Analysts expected £683.4 million, according to the average of 14 estimates.
“Our core food business performed well, underpinned by our quality investment programme, our simpler pricing strategy and lower regular prices,” chief executive officer Mike Coupe said in the statement. “We also saw strong growth in clothing and general merchandise, as well as in our convenience and online channels.”
The better-than-expected profit will fuel investor optimism that, after years of ceding market share, the UK’s largest grocers are wresting back momentum from discounters Aldi and Lidl. As the scrap for customers continues, Sainsbury is looking elsewhere for growth. The grocer is paying £1.4 billion for the owner of the Argos chain to bolster its online distribution and convenience offering.
Coupe said that he expects the grocery market to remain competitive “for the foreseeable future”.
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