UK retailer Sainsbury’s has posted like-for-like retail sales growth of 0.6% in the first half of its financial year, with the group reporting £16.68 billion worth of sales in the period.
Reported retail sales were up 1.2%, in the period, while underlying profit before tax rose by 20% to £302 million.
Profit after tax, however, declined by 13% to £144 million due to non-underlying charges relating to the restructuring of store management teams, the integration of the Argos business, and the proposed tie-up with rival Asda, the retailer said.
“The market remains very competitive and we are transforming our business to meet rapidly changing customer needs,” Mike Coupe, Sainsbury’s chief executive, commented on the results.
“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.”
Grocery sales grew by 1.2% in the period, while general merchandise sales were up 1.5%, with both categories boosted by the positive summer weather, Sainsbury’s said.
In addition, online grocery sales were up by close to 7%, while convenience sales rose by 4%.
Clothing sales were down 1%, however, due to changes in promotional phasing.
Commenting on the group’s planned combination with Asda, Coupe added, “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.”
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.