First Sainsbury profit decline for 22 years
BRITISH supermarket group Sainsbury suffered its first decline in profits for 22 years, in the year to March 9th. With gross margins under pressure, profits before exceptional items and tax fell 5.4 per cent to £764 million sterling while sales increased 11.9 per cent to £13.5 billion.
But underlying growth in sales volume through existing outlets was only 2.6 per cent in contrast to sales inflation at 4.5 per cent, with sales through new stores accounting for 4.8 per cent.
Losses ascribed to the BSE scare amounted to £8 million. Beef prices were slashed by 50 per cent at one stage, to stem the fall in sales. Beef sales are now back to 70 per cent of former levels.
The group opened 1.5 million sq ft of new sales area, mostly for Savacentre superstores, Shaws in the US and its Homebase DIY business. The group is to open its first retail outlet in Coleraine before Christmas. Total dividend payments are up 3.4 per cent.