Sainsbury’s has announced its first drop in profits in a decade as it counts the cost of “unprecedented” change in the supermarket industry.

The UK’s third biggest grocer racked up a profit of £681 million for the year to March 14th — a 14.7 per cent decline on a year earlier after a period in which like-for-like sales dropped 1.9 per cent.

The chain recorded a bottom-line loss of £72 million when including an accounting write-down to cover the lower value of its property estate.

Chief executive Mike Coupe said: "The UK marketplace is changing faster than at any time in the past 30 years which has impacted our profits, like-for-like sales and market share.

“However, we are making good progress with our strategy, and our investment in price and quality is showing encouraging early signs of volume and transaction growth.”

The company also cut its full-year dividend for shareholders by 23.7 per cent.