Radio Sandwell News

Sainsbury's reports first loss for 10 years

2015-05-06 10:25:00

Sainsburys

Sainsbury's has reported its first full-year loss for 10 years as the fierce competition within the UK grocery market continues.

The UK's third-largest supermarket chain reported a £72m loss in the year to March.

The results were hit by a number of one-off costs, including a write down in the value of some of its stores.

Excluding the one-off costs, underlying pre-tax profits fell 14.7% to £681m, compared with £798m the year before.

Like-for-like sales, excluding fuel, fell 1.9% as the chain faced competition from discount chains such as Lidl and Aldi.

Sainsbury's share price fell 1.3% in early morning trading.

'Drag'

In the results statement, chief executive Mike Coupe said: "The UK marketplace is changing faster than at any time in the past 30 years which has impacted our profits, like-for-like sales and market share."

Despite falling fuel prices and cheaper goods generally for customers, Mr Coupe told the Today programme: "With customers having more money in their pocket, they tend to eat out rather than eating in so that has a drag on the supermarket industry."

Last month, the UK's largest supermarket, Tesco, reported an annual loss of £6.4bn. Much of the loss was down to a decline in the value of its property portfolio.

The supermarket sector in general is suffering because of increased competition from cheaper stores, which has triggered a price war between the big chains. Sainsbury's said in November that it would spend £150m on cutting prices in its stores.

While competition for food sales remains fierce, Sainsbury's said its non-food business was doing well.

Sales of general merchandise grew by more than 7%, with clothing sales up nearly 12%.

Source: bbc.co.uk

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