Supermarket chain Sainsbury’s has reported a drop in profit after spending more than £560m to help keep a lid on prices over the last two years.
Its preliminary results for the 12 months to 4 March 2023 show a 5.4% increase in group sales to £35.15bn but underlying profit before tax fell to £690m, down 5% compared with £730m in the previous year.
Grocery sales were up 3.0%, driven by inflation as well as improved market share performance.
In the fourth quarter of the year, grocery sales increased by 7.4% and Argos sales jumped 9.3% amid a weak general merchandise market.
Chief executive Simon Roberts said that Sainsbury’s is “absolutely determined to battle inflation for our customers” and is now better value compared to its competitors that it has been many years.
He added that in the past 12 months the retailer has invested £225m to support its employees, including three pay rises, free food at work and an increased staff discount.
Another £66m was set aside to provide additional support to British farmers.
“We made these very deliberate decisions and investments because they make our business stronger, but more importantly because they are simply the right thing to do,” Roberts said.
“While there is still much to be done and there is no doubt that the year ahead will remain challenging, I’m confident we will continue to deliver for our customers, colleagues, communities and shareholders.”
Underlying profit before tax for the current year is expected to be between £640m and £700m.
