Sainsbury's profits fall, warns of pressure on sales

9th November 2011, Comments 0 comments

British supermarket chain Sainsbury's said on Wednesday that its first half net profit fell 13 percent after changes to its property investments, which offset solid sales growth across the group.

Profit after tax dropped to £302 million ($482 million, 352 million euros) in the 28 weeks to October 1, Sainsbury's said in a statement. That compared with £347 million in the equivalent six-month period last year.

Sales rose 7.6 percent to £12.8 billion, while customer visits to its stores rose by one million to almost 22 million a week.

"We are pleased with our sales and profit performance, given the challenging economic environment," Sainsbury's chairman David Tyler said in the statement.

The London-listed group added that high fuel prices would continue to influence consumer spending and shopping habits in Britain.

"With fuel costs representing a higher proportion of disposable income, customers are reducing what they spend on their weekly grocery shopping and are continuing to budget prudently," the company said.

"By purchasing fewer items on each shopping trip and doing more top-up shopping, customers are not only demonstrating a desire to keep a tight rein on budgets but also to reduce food waste."

British annual inflation struck a three-year peak in September as a result of surging household energy bills and high petrol prices.

Consumer Prices Index (CPI) annual inflation raced to 5.2 percent last month, compared with 4.5 percent in August, official data showed.

Sainsbury's is the third-biggest supermarket chain in Britain after Wal-Mart owned Asda and the country's biggest retailer Tesco.

© 2011 AFP

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