British supermarket Sainsbury reports profit leap

10th November 2010, Comments 0 comments

British supermarket chain Sainsbury boosted net profits by 38 percent in the first half of its year, on record customer numbers, new floor space and cost-cutting, the high-street brand reported on Wednesday.

The strong figures strike the same note as quarterly figures from another barometer high-street brand Marks and Spencer, on Tuesday, despite the imminence in recent months of a deep state austerity spending review.

Earnings after tax rallied to 348 million pounds (403 million euros, 557 million dollars) in the 28 weeks to the start of October, compared with 286 million pounds in the equivalent part of the previous 2009/2010 financial year.

Sales climbed seven percent to 11.944 bilion pounds and pre-tax profits rose eight percent to 332 million, the company added in a results statement.

"Customer numbers are now at an all-time high of over 20 million transactions every week, which is up one million on last year, a clear indication of our growing universal customer appeal," said chief executive Justin King.

On a like-for-like basis, stripping out the effect of new floor space and excluding fuel, sales increased by 2.0 perecent in the first half.

"The board is pleased with Sainsbury's continued strong performance in the first half of the year," added chairman David Tyler in the earnings release.

"We continue to gain market share and have seen good profit growth," he added.

"We have made excellent progress towards delivering our strategic objectives, particularly in offering our customers great food at fair prices and growing our space."

The supermarket chain also created more than 2,000 jobs as a result of new stores and extensions.

The company, which now has 890 stores dotted across Britain, added that it was faring well in "challenging" trading conditions.

"Sainsbury's continues to perform well in what remains a challenging economic environment, continuing to develop its offer and invest for the future, whilst delivering its growth strategy and maintaining the strength of its balance sheet," it said.

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

© 2010 AFP

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