Sainsbury’s has reported a 92% slump in pre-tax profits, with sales falling despite price cuts and new value ranges.
The supermarket chain, which also owns Argos, said it had achieved “positive momentum in grocery market share” in highly competitive times.
It reported a 0.2% decline in group sales to £16.8bn over the 28 weeks to 21 September – its first half – with like-for-like sales, a comparable measure, falling 1%.
Trading pre-tax profits fell 15% to £238m. Sainsbury’s blamed the phasing out of cost savings and tough weather comparisons.
On a statutory basis, pre-tax profits, which include one-off costs, came in at £9m. The figure covering the same period last year was £107m.
The company said this was mainly explained by a previously-flagged writedown in the value of its store estate and was mainly non-cash.
Sainsbury’s said its grocery and clothing offerings had a better performance in the second quarter than in the first.
Its chief executive, Mike Coupe, is under pressure to grow revenue after being accused of taking his eye off the ball as he fought for a £12bn merger with Asda.
The deal was blocked on competition grounds in April.
Mr Coupe said of the first half performance: “We have created positive momentum across the business through strategic investments in our customer offer.
“We have lowered prices on every day food and groceries, launched a range of value brands and are more competitive on price than we have ever been.
” We are investing in hundreds of Sainsbury’s and Argos stores, introducing new products and services and continually improving service and availability. As a result, customer satisfaction has increased significantly year on year.”
The company raised its interim dividend by 6%.