Sainsbury’s on Wednesday put out a brutal half year report showing sales continue to fall and profits are diving.
Here are the highlights (or lowlights):
- Group sales down 2% to £13.6 billion ($US20.6 billion);
- Sales excluding new shop openings down 1.6%;
- Pre-tax profit down 17.2% to £308 million ($US467.1 million);
- Return on capital employed down from 11.1% this time last year to 9.1%.
Sainsbury’s titles the update: “Delivery of strategy on track in a highly competitive market”, and talks a lot about the supermarkets “values” and great customer service. But whichever way you look at it this is a brutal set of results.
Sainsbury’s used to be the star performer out of Britain’s “Big Four” supermarkets, delivering 9 straight years of sales growth.
But the rise of aggressive discount retailers Aldi and Lidl has sparked a brutal price war in the supermarket sector, which has hit Sainsbury’s hard. It coincided with a change in management, with veteran CEO Justin King leaving last July after 1o years.
His replacement, former CFO Mike Coupe, has struggled. Sales have now fallen for 6 straight quarters and the supermarket made its first loss in a decade earlier this year.
Coupe says in today’s update:
The grocery retail marketplace remains challenging but Sainsbury’s is a great business, run by an experienced management team, supported by talented colleagues and strong values. I am confident we are making progress and we are looking forward to a successful Christmas, offering our customers fantastic products and great value.
We think our Orkney Island dressed crab, our Taste the Difference 18 Month Mature Cognac Laced Christmas Pudding, which recently won the Good Housekeeping 2015 taste test, and our stunning hand-finished Taste the Difference Golden Bow Fruit Cake will be customer favourites.
NOW WATCH: Volkswagen just announced another scandal, and it could cost them an additional $US2 billion
Business Insider Emails & Alerts
Site highlights each day to your inbox.