Sainsbury's has proclaimed "significant progress" in its full year preliminaries, despite reporting a drop in sales and profits. LFL sales were down 0.9% in the 52 weeks to 12th March 2016 – down for a second consecutive year.
Sainsbury’s maintained a market share of 16.5%, yet underlying group sales declined by 1.1% to £25,829m, while underlying profit before tax declined by 13.8% to £587m.
Volume and transactional growth, driven by product quality improvements, a simpler pricing strategy and improved service and availability, helped Sainsbury's non-food categories to continue to grow, a strong multi-channel strategy delivering growth in store and online.
Chief executive Mike Coupe comments: “We are making good progress against the strategy we outlined to shareholders in November 2014. We continue to outperform our main supermarket peers and maintain market share in a competitive, deflationary environment. We deliver great quality products and services at fair prices, whenever and wherever customers want to shop – and with volumes and transactions up, it is clear customers are responding positively to our offer.
"Our core food business performed well, underpinned by our quality investment programme, our simpler pricing strategy and lower regular prices. We also saw strong growth in clothing and general merchandise, as well as in our convenience and online channels. These results reflect the multi-product, multi-channel shopping experience customers are looking for today and our proposed acquisition of Home Retail Group plc will accelerate our strategy in this direction.
“We continue to manage our costs and capital expenditure carefully and, after making operating cost savings of £225m this year, we are on track to deliver our three-year £500m cost saving programme by the end of 2017/18. Ongoing pricing pressures and food price deflation have impacted our sales and operating margins. As a result, underlying profit and earnings per share are down this year versus last year.
“The market is competitive, and it will remain so for the foreseeable future. We believe we have the right strategy in place and are taking the right decisions to achieve our vision to be the most trusted retailer where people love to work and shop."