Britain's number two grocery retailer J Sainsbury has reported full-year figures which it claims show that it is well on the way to meeting its long-term targets.
The company reported underlying pre-tax profits of £695 million (€974m), up 10.8 per cent on the previous year, while actual profits before tax rose 16.8 per cent to £667 million. Sales for the group were up by a more modest 1.6 per cent to £18.5 billion.
Sir Peter Davis, J Sainsbury's chief executive, said: "We have made sound progress and continued to deliver on our promises during the past year despite increasingly tougher market conditions. In the UK we have made significant achievements in modernising our business through our transformation programme and continued to deliver an improved sales performance despite more normal market growth following the previous year's buoyant conditions."
Davis said that the group, which is competing with all its main UK rivals to acquire the Safeway group, had already delivered £210 million of cost savings, £10 million above target, and that it was confident of being able to deliver a further £250 million of savings in 2003/04, again ahead of target.
At the group's UK arm, Sainsbury's Supermarkets, total sales of £15.3 billion were up 3.0 per cent year-on-year, while like-for-like sales were ahead 2.3 per cent (including petrol). The company also saw a strong improvement in its Internet shopping arm (an area where arch rival Tesco has traditionally held the upper hand) with sales up 71 per cent. The Sainsbury's To You unit is now on track to break even in the second half of 2003/04, Davis said.
At Shaw's, the company's US arm, sales were up 4 per cent to $4.4 billion, although like-for-like growth was a more modest 0.9 per cent, reflecting the difficulties facing the US market as a whole during the year.
During the year the group opened 15 new supermarkets and 24 Locals (convenience stores) in the UK, as well as carrying out 40 refurbishments and 29 extensions. Like Tesco, J Sainsbury sees the convenience store segment as a good opportunity for growth, and the group will seek to expand its 57-strong store portfolio this year.
"The coming year will be a period of huge change in our UK Business Transformation Programme and our aim remains to balance profit growth with sales growth while investing in our business," said Davis. "We have taken action to improve sales with a significant investment in customer service creating 10,000 new jobs, today launched a major campaign on fresh food consolidating our lead in this area and will be following with our non-food launch in the autumn."