Sainsbury’s to step up investment after Asda deal killed

Grocery retailer plots to reduce net debt by at least £600m

Photograph: Peter Nicholls/Reuters

Photograph: Peter Nicholls/Reuters

 

Sainsbury’s, chastened by the blocking of its takeover of rival supermarket group Asda, said it would accelerate investment in its store estate and technology as it seeks to redress a decline in underlying sales.

Sainsbury’s said on Wednesday it would invest to improve more than 400 of its supermarkets this year, would reduce net debt by at least £600 million (€697 million) over the next three years, and would maintain its dividend policy.

“I am confident in our strategy and also clear on what we need to do to continue to evolve the business in a highly competitive market where shopping habits continue to change,” said chief executive Mike Coupe.

Sainsbury’s fourth quarter to March 9th like-for-like sales fell 0.9 per cent, having fallen 1.1 per cent over the Christmas period. They fell 0.2 per cent over the full 2018-19 year.

Underlying pretax profit for the year did, however, rise by a better-than-expected 7.8 per cent to £635 million helped by synergies from the Argos general merchandise business it purchased in 2016, and the total dividend increased 7.8 per cent to 11.0 pence.

“Retail markets are highly competitive and very promotional and the consumer outlook continues to be uncertain,” Sainsbury’s said.

“However, we are well placed to navigate the external environment and remain focused on delivering our strategy.” – Reuters