Big blow for Sainsbury’s in UK Price War
Sainsbury's in the UK has insisted it will remain competitive after posting a fall in profits of nearly 14%
4 May 2016 | 0
Retail giant Sainsbury’s has insisted it will remain competitive in the fiercely competitive UK market despite posting a near-14% fall in profits. The supermarket retailer is experiencing mixed fortunes currently, posting pre-tax profits of £587m, down from £681m for the previous year to 12 March – while in the middle of a deal to buy out Argos owner Home Retail Group for £1.4bn. Overall sales slipped by 1.1% to £25.8bn, while like-for-like sales dropped by 0.9% during the year.
“The market is competitive,” said chief executive Mike Coupe defiantly, “and will remain so for the foreseeable future.”
Martin Lane, economist with money.co.uk, said the slide should be seen as an opportunity by Sainsbury’s. “These are turbulent times for supermarkets,” he said, “with the CMA laying down the law on how the industry promotes deals last week.
“The government’s plans to force retailers to be more transparent might feel like another blow in the supermarket wars but it doesn’t have to be. Sainsbury’s ought to see it instead as an opportunity and seize the competitive advantage by becoming one of the good guys.
Sainsbury’s should ensure their marketing and communication is honest, simple and easy to understand,” Lane continued, “and that will help keep the trolley’s coming through the doors.”