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Sainsbury's profits rise

Sainsbury's has posted a 9% rise in profits to £665 million for the year to 19 March, ahead of market forecasts of £661 million. Full year sales grew by 7% to £22.9 billion.

The supermarket said it outperformed the market in a challenging environment and increased market share with weekly customer transactions now reaching 21 million, up one million on last year. It also reported that non-food sales are growing at more than three times the rate of food and that Sainsbury’s was now the UK’s seventh largest clothing retailer. The Sainsbury's Local convenience stores had achieved sales of £1 billion for the first time and the online grocery delivery business grew by 20%.

In addition, Sainsbury’s announced that staff would be sharing a £60 million bonus pot and that 6,000 new jobs had been created through store investment.

Justin King, CEO, said: "Sainsbury's has continued to perform well. Customer numbers are at an all-time high of 21 million transactions every week, which is up one million on last year, a clear indication of our growing universal customer appeal across all channels. We have added gross space of 1.5 million sq ft to our store estate, creating over 6,000 new jobs with Sainsbury's. Strong sales growth, combined with productivity savings and tight control on operating costs, have helped to deliver good profit growth. Our colleagues continue to deliver great service, exceeding our stretching customer service targets, and we are delighted to be paying our colleagues a bonus of around £60 million."

He continued: "We expect the economic environment to remain uncertain over the coming year. We remain confident that our strategy, alongside continued strong operational performance, will enable the business to make further good progress."

David Tyler, Chairman, said: “Despite a challenging economic environment, our strategy of universal appeal, underpinned by our values, has enabled us to deliver a good sales and profit performance. We continue to gain market share and achieved growth in underlying earnings per share of over 10%. As a result, the Board is recommending a full year dividend of 15.1 pence, an increase of 6.3 % over last year.”

Source : The Retail Bulletin

11 May 2011
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