Sainsbury's, the UK's number two food retailer, has reported preliminary figures for the fourth quarter and full year 2002 which show that the company's programme of restructuring over the last few years is continuing to pay off.
The supermarket group said that total UK sales for the year would be up by some 3.4 per cent, while like-for-like sales were ahead 2.3 per cent. It added that it expected to make cost savings of around £200 million (€291.7m).
In the US, the group's Shaw's division posted a 2.1 per cent increase in sales for the year, although like-for-like sales were up by a more modest 0.9 per cent.
Peter Davis, group chief executive, said: "In slower markets in both the UK and the US we have delivered steady sales during the year while making significant progress with our business transformation programme in the UK. In addition we expect to achieve the double-digit profit growth target for this year, giving profits that are in line with consensus market expectations."
He said that significant progress had been made in the UK business transformation programme, with two of four new automated depots already open and beginning to build up capacity.
"We have installed new electronic point-of-sale equipment and in-store computer systems in 308 stores and 129 petrol filling stations. In this quarter we have also opened eight new supermarkets, 11 Local stores, delivered nine extensions and four refurbishments."
He continued: "During our recovery programme we have to balance the need for profit growth with sales growth whilst incurring significant costs in implementing our business transformation programme. With hindsight in quarter four we probably went too far in reducing promotions and operating costs to achieve the profit target, at the expense of sales, in what turned out to be a soft market. Like-for-like sales were 1.3 per cent including petrol and -1.1 per cent without."
But on the whole, Davis was happy with the company's performance during the year. "We enter the new year with renewed focus on service in-store, our fresh food offer and, this autumn, the re-launch of our non-food offer to drive sales momentum. We remain confident that we are making real progress across the group to achieve our targets. Our profit margins and sales continue to improve, our ambitious infrastructure renewal programme in the UK is on track and we are achieving our planned cost savings."