Sainsbury’s has delivered a strong set of results for the 52 weeks to 15 March 2014 as it shunned price cutting made by its big four rivals.
Annual pre-tax profit rose 16.3 per cent to £898m for the year compared to £772m last year.
It said it maintained market share in a “tough retail environment.”
Sainsbury’s have increased its underlying operating margin to 3.65 per cent; beating rival Tesco which has seen its operating profit margin plummet from 6.5 per cent to 3.3 per cent in just one year.
The big four supermarkets are reviewing their strategies with Tesco, Morrisons and Asda all announcing price cuts this month.
Outgoing chief executive Justin King pointed out that its online and convenience business continued to grow strongly and that its Sainsbury’s Bank was “on track.” Over the last two years Sainsbury’s has seen a 30 per cent increase in number of deliveries per van and 30,000 customers now own an annual delivery pass.
But King warned that conditions in the food retail sector were “likely to remain challenging for the foreseeable future.”
David Tyler, Chairman, said that under King’s leadership customer transactions increased by ten million a week to around 24m and annual sales grew by £10.3bn to £26.4bn.
A note from Espirito Santo Investment Bank said its balance sheet remained “fairly stretched” as its net debt increased by £200m to £2.4bn. “The company’s outlook is fairly vague with FY LFL sales growth similar to 2013/14, net debt to be similar and cost inflation to be at the lower end of the 2-3% range,” it said.
Meanwhile, incoming CEO Mike Coupe has reshuffled his management team as Roger Burnley, MD of general merchandise, clothing and logistics becomes retail and operations director. Retail director Helen Buck becomes business development director while Paul Mill-Hicks is promoted to food commercial director.