Sainsbury’s profits double, but retailer warns of fall in current year

0
iStock image

Supermarket group Sainsbury’s followed rivals in warning of lower profit for the current year due to soaring inflation, taking the shine off a more than doubling in profit for its 2021-22 year.

Sainsbury’s, Britain’s second largest grocer after Tesco, said on Thursday its underlying profit before tax in 2022-23 was expected to be between £630-690 million. Analysts on average had been expecting £703m for 2022-23.

The group made underlying profit before tax of £730m in the year to March 5, 2022, up 25 per cent versus 2019-20 fiscal and up 104 per cent versus 2020-21, which included substantial Covid-19 costs.

Grocery sales were up 7.6 per cent from 2019-20 and broadly flat from last year, reflecting sustained Covid-19-driven demand. However, general merchandise sales were down 4.6 per cent from 2019-20 and 11.9 per cent from last year, which the groups said was due to availability challenges in key product areas.

“We have outperformed key competitors on both a one and two-year basis while also delivering strong underlying profit growth, improved returns and consistent retail free cash flow. This gives us a strong foundation to keep building momentum in the year ahead,” Simon Roberts, Sainsbury’s chief executive, said.

“We have a clear long term focus on keeping prices low and we remain committed to helping everyone eat better, whatever the external environment may bring.”