Tastier profits for Sainsbury's
MORE than £600million was added to Sainsbury’s market value as it defied a fierce supermarket price war with better-than-expected quarterly sales and forecast higher annual profit.
Weaning shoppers off promotions and focusing on lower regular prices has paid off as it attracted new customers while existing customers have bought more items.
Its recently launched Tu clothing website has made a strong start, while an overhaul of its own-brand ranges brought a four per cent rise in Taste the Difference sales volumes.
Chief executive Mike Coupe, pictured, noted “encouraging signs of stabilisation” in the performance of its bigger stores after a downturn over the past four or five years, although it was too early to say the corner had been turned.
He said: “I don’t think the market is getting any easier but we have simplified our prices and reduced them. It makes our supply chain easier to manage.
Online groceries orders grew at more than 15 per cent and clothing sales were up nearly 13 per cent helped by its Back to School campaign.
Coupe said if current market trends continue, annual underlying pre-tax profit will be “moderately ahead” of the consensus forecast of £548million.
Bernstein analyst Bruno Monteyne said the update marked a “change of tone” for Sainsbury’s, adding: “It has tried to take a cautious message up to now – that it will go ‘toe to toe’ with whatever price investment anyone else makes.
Tastier profits for Sainsbury'sMORE than £600million was added to Sainsbury’s market value as it defied a fierce supermarket price war with better-than-expected quarterly sales and forecast higher annual profit.Weaning shoppers off promotions and focusing on lower regular prices has paid off as it attracted new customers while existing customers have bought more items. Its recently launched Tu clothing website has made a strong start, while an overhaul of its own-brand ranges brought a four per cent rise in Taste the Difference sales volumes. Chief executive Mike Coupe, pictured, noted “encouraging signs of stabilisation” in the performance of its bigger stores after a downturn over the past four or five years, although it was too early to say the corner had been turned. He said: “I don’t think the market is getting any easier but we have simplified our prices and reduced them. It makes our supply chain easier to manage. Online groceries orders grew at more than 15 per cent and clothing sales were up nearly 13 per cent helped by its Back to School campaign. Coupe said if current market trends continue, annual underlying pre-tax profit will be “moderately ahead” of the consensus forecast of £548million. Bernstein analyst Bruno Monteyne said the update marked a “change of tone” for Sainsbury’s, adding: “It has tried to take a cautious message up to now – that it will go ‘toe to toe’ with whatever price investment anyone else makes.
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