Sainsbury's sparks industry concern with 40% bottom-line profit fall
PUBLISHED: 14:17 08 November 2018 | UPDATED: 14:54 08 November 2018
Sainsbury's has added to fears over dwindling consumer spending in the run up to Christmas, as it warned over an uncertain outlook amid "unprecedented times".
Announcing half-year results, Sainsbury’s said: “The consumer outlook is uncertain as we head into our key trading period.”
The chain added its markets also continued to be “highly competitive and very promotional”.
The comments came as Sainsbury’s reported a 40% slump in bottom-line profits to £132m for the six months to September 22 after a raft of costs, including store restructuring and expenses related to its planned £12bn merger with Big Four rival Asda.
But on an underlying basis, pre-tax profits rose 20% to £302m.
Sainsbury’s boss, Mike Coupe, said: “We have to strike a note of caution, because we are in unprecedented times in my experience.”
Despite the caution, Sainsbury’s said it remained on track for full-year expectations, with analysts pencilling in underlying pre-tax profits of £634m, up from £589m in 2017-18.
Mr Coupe admitted the group had seen “bumpy” stock availability in its stores over the early summer period after controversial recent pay and contract changes for its 135,000 store staff and managers.
He said: “Particularly during the warm weather, availability was a challenge because people were buying certain items.”
He insisted availability had returned to normal levels and added that the chain was “very confident of our standards”.