Sainsbury's profits down 13.8%

For the year to March 12 the retailer saw a profit of £587 million - a fall of 13.8 per cent.

Sales volumes during the year declined by 1.1% but transactions within the group increased, suggesting declines have been driven by reduced shelf edge prices and deals.

There was better news for the chain’s convenience stores, which saw 9% growth and 69 new Sainsbury’s Local outlets.

The supermarket’s future plans include opening 15 Netto stores to compete with the discounters. In April, Sainsbury's agreed to buy Argos-owner Home Retail Group, which will allow customers to choose from more than 50,000 products and collect them in 2,000 outlets within four hours.

NFU comment

Sainsbury’s continue to develop its agricultural initiatives which now see development groups being formed across ten key commodity areas.

These initiatives vary in terms of their offering to British agriculture. The dairy development group offers a cost of production contract to producers whereas the beef and lamb groups are based around knowledge transfer and improving efficiencies for producers.

These sustainable pricing models for dairy have been welcomed at a difficult time for the industry. We would however like to see Sainsbury’s develop a sustainability commitment to the farmers working within their cheese group.

Over the past year Sainsbury’s increased its British lamb season by five weeks; this was a welcome move but we wish to see this maintained and pushed further in 2016/17.

At this time the NFU has seen little public commitment from Sainsbury’s in terms of their fruit and vegetable supply chains. However we are pleased that Sainsbury’s is engaged in our initiative to increase the consumption of fruit and vegetables.

Sainsbury’s CEO Mike Coupe has said that the business is finding the retail market fiercely competitive and is suffering from competitive pricing . As it moves to everyday low prices and reduced promotions, we would urge Sainsbury’s to be considering building in sustainable pricing and sourcing models, which can be passed back to primary producers.