UK retailer J Sainsbury plc (LSE:SBRY) reported today a 6.8% increase in total sales for 2011 to GBP24.5bn and said that it outperformed the market and increased its market share.
Profit before tax fell 3.4% to GBP799m, but the company said that its underlying profit before tax showed an increase of 7.1% to GBP712m.
Over the course of the year Sainsbury’s saw its market share rise to 16.6%, which it said was the highest for nearly a decade.
Chief executive Justin King claimed that the company’s price perception on branded groceries is improving, driven by the introduction of Brand Match which reassures customers that they are paying either the same or less at Sainsbury’s for branded goods.
In addition to this, Sainsbury’s Taste the Difference and Basics brands are both performing well and the company reported that these products appear side-by-side in many shopping baskets, showing that customers are saving on some items while treating themselves on others.
The other side of the supermarket business, general merchandise and clothing, is continuing to grow faster than the food business and is gaining market share. The retailer is developing its store estate, expanding its ability to offer non-food ranges, and now has 161 stores selling its larger non-food offering, 22 more than last year.
Sainsbury’s is also opening more smaller stores and during 2011 the company met its target of opening new convenience stores at a rate of one to two a week, with 73 to new stores taking the total to 440.
Many consumers are continuing to do more of their shopping from home and online grocery orders now exceed 165,000 a week, with an annual turnover of around GBP800m which places Sainsbury’s second in the market.
Beyond the company’s core operations, the pharmacy business is being expanded and Sainsbury’s Bank had a good year, recording a 40% increase in pre-tax operating profit.
The board of directors has proposed a final dividend of GBP0.116 to make a full-year dividend of GBP0.161, up 6.6% from last year’s dividend of GBP0.151.