Money Story

06 July 2008 21:42 BST

Sainsbury beats growth targets

Wednesday, 14 May 2008 10:00

Sainsburys says it has beaten its growth expectations

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Grocer J Sainsbury has reported a 28.4 per cent jump in underlying pre-tax profit to £488 million and said it has exceeded targets for the year.

The UK's third biggest supermarket, behind Asda and market leader Tesco, also announced plans to launch an online non-food business in the first half of 2009/2010.

Profit before tax, which includes one-off items, was flat at £479 million, compared to £477 million for last year.

The supermarket chain said profits were dented by £27 million of costs after accepting a fine from the Office of Fair Trade (OFT) relating to a dairy price-fixing investigation and a £7 million charge from fighting off a takeover bid from Qatari-backed investment fund Delta Two.

Sainsbury's Bank also made the group a £3 million loss, compared to gains last year from a partial sale to HBOS.

However, the group was upbeat about the results as it has grown total retail sales over the period by £2.7 billion – beating its own £2.5 billion target.

Like-for-like sales rose 3.9 per cent while total sales were up 5.8 per cent to £19.3 billion.

Sainsbury also added 2.5 million extra customers over the period, the group said.

Chief executive Justin King said: "Over the past 12 months we have continued to make good progress growing like-for-like sales (excluding fuel) by 3.9 per cent and I'm delighted that the year culminated in fulfilling the commitments made in October 2004."

Sainsbury has recently shifted the focus of its marketing campaign featuring celebrity chef Jamie Oliver from health and ethical values to value-for-money, with its "Feed your family for a fiver" campaign.

Customer reaction has been positive, the group said, with sales of minced meat - featured in the first ad – up 200 per cent.

Shares in Sainsbury dipped slightly immediately after opening, by 0.58 per cent to 387.50p. End of story

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Sainsbury beats growth targets

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