Sainsbury’s reaches record profits as Justin King departs

The British grocery market has been rattled in recent months. The growing popularity of discount retailers like Lidl and Aldi and the success of Waitrose at the other end of the scale has caused something of an identity crisis for the large supermarkets in the middle.

But Sainsbury’s has managed to ride out the problems its closest competitors have struggled to avoid, posting pre-tax profits of £898m in the year to March 15, a rise of 16.3%.

The positive results will be the last presented by chief executive Justin King, who is leaving in July. King joined the supermarket in 2004 amid a tumultuous period in which Sainsbury’s was rapidly losing market share.

The rise in profits will mean that King will end his tenure on a high note. But there remain concerns among investors that an increased propensity for supermarkets to drive down prices over coming months could hit Sainsbury’s hard.

According to the Telegraph, Sainsbury’s is the most shorted stock in the FTSE 100 and hedge funds have put huge sums on the share price falling.

King said: “In a competitive retail environment we have focused on delivering high quality, affordable own-brand products across all our channels, helping customers to Live Well for Less.

“While the general economic outlook is showing some signs of improvement, conditions in the food retail sector are likely to remain challenging for the foreseeable future as customers continue to spend cautiously.”

NOW READ:

Exclusive interview: Michael Portillo on the rise of UKIP and the state of UK business

Portillo interview

Social Bookmarks