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| Sainsbury's profits slide 18% amid supermarket price war | Sainsbury's profits slide 18% amid supermarket price war |
| (35 minutes later) | |
| Sainsbury’s has reported an 18% slide in profits for the first half, hit by lower sales and a fierce supermarket price war, but said it is looking forward to a successful Christmas. | Sainsbury’s has reported an 18% slide in profits for the first half, hit by lower sales and a fierce supermarket price war, but said it is looking forward to a successful Christmas. |
| The supermarket posted a profit before tax and one-off items of £308m for the 28 weeks to 26 September. This is its lowest first-half profit since 2010 and down from £375m from a year earlier. However, its performance was better than expected by City analysts, who had been forecasting a far larger fall in profits, to between £284-293m. | |
| Like-for-like sales at stores open at least a year were down 1.6%, excluding petrol. Food sales fell nearly 1% but the retailer’s Taste the Difference range saw more than 2% growth. | |
| Clothing sales were strong, rising almost 10%, as Sainsbury’s launched its Tu clothing range online. So far sales have beaten its expectations. | Clothing sales were strong, rising almost 10%, as Sainsbury’s launched its Tu clothing range online. So far sales have beaten its expectations. |
| Related: Sainsbury's chief attacks proposal to change Sunday trading laws | Related: Sainsbury's chief attacks proposal to change Sunday trading laws |
| Sainsbury’s had already signalled an improvement in September when it said that annual profits would be higher than expected, after sales at its big stores stabilised and it reduced the cost of food thrown away. | Sainsbury’s had already signalled an improvement in September when it said that annual profits would be higher than expected, after sales at its big stores stabilised and it reduced the cost of food thrown away. |
| The retailer said the market remained challenging, blaming food deflation and tough competition from discounters such as Aldi and Lidl, which has reduced its market share to 16.5%. | |
| Sainsbury’s chief executive, Mike Coupe, said the strategy he set out a year ago was working. Sainsbury’s has been cutting prices and improving product quality and customer service to stop customers defecting to the discounters. It has reduced the amount of sugar in its own-brand yoghurts and juices and launched a £10m, five-year project called Waste Less, Save More, to tackle food waste. | Sainsbury’s chief executive, Mike Coupe, said the strategy he set out a year ago was working. Sainsbury’s has been cutting prices and improving product quality and customer service to stop customers defecting to the discounters. It has reduced the amount of sugar in its own-brand yoghurts and juices and launched a £10m, five-year project called Waste Less, Save More, to tackle food waste. |
| Coupe said: “I am confident we are making progress and we are looking forward to a successful Christmas.” | Coupe said: “I am confident we are making progress and we are looking forward to a successful Christmas.” |
| The retailer said its cost savings programme was ahead of plan, with savings of around £225m expected by the end of this financial year, leaving it on track to deliver £500m cost savings over the next three years. | The retailer said its cost savings programme was ahead of plan, with savings of around £225m expected by the end of this financial year, leaving it on track to deliver £500m cost savings over the next three years. |
| Richard Hunter, the head of equities at Hargreaves Lansdown Stockbrokers, said:“There is little doubt that Sainsbury is improving on a number of fronts, although overall the company remains a work in progress.” | Richard Hunter, the head of equities at Hargreaves Lansdown Stockbrokers, said:“There is little doubt that Sainsbury is improving on a number of fronts, although overall the company remains a work in progress.” |
| Phil Dorrell, of retail consultants Retail Remedy, said: “One constant enigma for us is that Sainsbury’s do not make more of Tu Clothing. They have a real capacity for sales and profit growth, but this is just left on the table due to continuing poor instore execution.” | Phil Dorrell, of retail consultants Retail Remedy, said: “One constant enigma for us is that Sainsbury’s do not make more of Tu Clothing. They have a real capacity for sales and profit growth, but this is just left on the table due to continuing poor instore execution.” |