Sainsbury’s have reported a fall in profits as the price war and costly acquisition take their toll.
In the 28 weeks to September 24, Sainsbury’s posted a 10.1 per cent fall in underlying pretax profit, down from £308 million in 2015 to £277 million.
However, group sales in the half-year period edged up by 2.1 per cent, from £13.6 billion to £13.9 billion from last year while profit before tax rose by nearly 10 per cent from £339 million to £372 million.
Its recent £1.4 billion acquisition of Argos parent company Home Retail Group is also on track, with 250 Argos digital stores expected in the outlets in the next three years.
It also says it is confident it will have 30 Argos digital stores and 200 collection point in supermarkets by Christmas.
Net debt from the acquisition fell by £485 million from March and the grocer said it was on track to deliver a cost-saving of £500 million by 2017/2018 and announced a new target to achieve the same in three years.
“The acquisition of HRG accelerates our strategy to give customers choice, convenience, speed and flexibility in when, where and how they shop,” chief executive Mike Coupe said.
“Food will always be at our heart and we are strengthening our Clothing, General Merchandise and Financial Services offers to realise the potential of the group.
“The combination of our products, services, customer data and fast delivery networks gives us a strong platform for growth and enables us to deliver clear synergies.
“The market remains competitive and pricing pressures continue to impact margins. The full impact of the devaluation of sterling on retail prices is as yet uncertain. However, we are well placed to navigate the external environment and remain focussed on delivering our strategy.”