Sainsbury’s has reported a fall in its pre-tax profit for the year, after revealing it has spent more than £560m on “keeping our prices low over the last two years”.
The UK’s second-largest supermarket said that in the year ending 4 March, its group revenue was up 5.3% to £31.491bn, but profit before tax was £327m – down from £854m at the same time last year.
The group, which has a 15% share of Britain’s grocery market, outlined in its annual results that underlying pretax profit was £690m in the year to March 4, but down from the £730m made in 2021-22.
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For the 2023-24 year, it forecast profit between £640 and £700m, ahead of analysts’ average forecast of £631m.
Sainsbury’s said the outlook for consumer spending remained uncertain but it had started the new financial year “with great momentum”.
Additionally, the retailer has launched its new loyalty initiative, Nectar Prices, as it looks to compete with leading retailer Tesco’s Clubcard scheme.
“We really get how tough life is for so many households right now which is why we are absolutely determined to battle inflation for our customers,” chief executive Simon Roberts said.
“Our focus on value has never been greater and we have spent over £560 million keeping our prices low over the last two years.
“As a result, we are now the best value compared to our competitors that we have been in many years and we are delivering improved market share performance in Sainsbury’s and Argos.”
He added: “We are two years into our plan to put food back at the heart of Sainsbury’s and have focused our efforts on reducing costs right across the business, which has enabled us to make the right decisions for our colleagues and customers.
“Our colleagues do a fantastic job serving our customers every day and we know that they are also dealing with the impact of the rising cost of living.
“That’s why, over the last 12 months, we took the decision to invest £225 million in supporting colleagues including raising colleague pay three times, becoming the first major supermarket to pay our people the Living Wage across the whole country and providing free food at work and increased colleague discount,” Roberts commented.
