Sainsbury’s Reports Higher Than Expected Profits, Credits Aldi Price Match Campaign and Nectar Card Benefits
Sainsbury’s, the country’s second-largest supermarket chain, has announced strong financial results for the 2022/23 financial year, exceeding company forecasts and reporting higher than expected profits.
The company reported an underlying pre-tax profit of £701m, a 1.6% increase from the previous year’s £690m. This exceeded Sainsbury’s own forecasts of between £670m and £700m. The supermarket chain has attributed its success to its Aldi Price Match campaign and its efforts to provide better prices to Nectar card holders.
However, the company also faced some challenges during the year, including disruptions to online deliveries due to technical glitches. A Sainsbury’s spokesperson addressed the issue, stating, “We have contacted these customers directly to apologize for the inconvenience.” This is not the first time the chain has faced such issues, with similar disruptions occurring last month.
Despite these challenges, Sainsbury’s reported a total sales figure of £36.3bn, a 3.4% increase year-on-year. The company also expects to see strong profit growth in the coming year, with projected underlying profit of up to £1.06bn, a potential increase of 10%.
In February, Sainsbury’s announced cost-cutting measures, including 1,500 job cuts. The company’s results report also highlighted its launch of nearly 1,200 new products during the year, with a 12% growth in sales for its premium Taste the Difference range. While grocery sales saw a significant increase of over 9%, clothing sales were down 6.4%.
The company also faced challenges with supply disruptions due to attacks on shipping in the Red Sea region. Despite this, Sainsbury’s reported a 4.8% rise in like-for-like sales, excluding fuel, in the fourth quarter. However, this was a decrease from the previous three months, where the company saw a 7.4% rise in sales.
Statutory pre-tax profits for the year were £277m, a decrease of over 15% from the previous year, largely due to a restructuring of the company’s banking division.
Sainsbury’s Chief Executive Simon Roberts expressed satisfaction with the company’s performance, stating, “We said we’d put food back at the heart of Sainsbury’s and that’s what we’ve done. Our food business is firing on all cylinders. We have the best combination of value and quality in the market, and that’s winning us customers from all our key competitors, driving consistent volume market share growth as more customers choose us for their weekly shop and all their special occasions.”
Last year, Sainsbury’s reported a 5.4% rise in sales but a 5% fall in pre-tax profits. With its strong performance this year, the company is optimistic about its future growth and success.
