SUPERMARKET J Sainsbury has announced a fall in profits this week (w/e May 21) increasing concerns that farmgate prices could come under further pressure.
Figures for the year ending Mar 27, 2004 show that pre-tax profits slipped almost 3% to £695m, despite a 2.2% increase in retail sales to £15.3bn.
The disappointing performance – market leader Tesco announced record profits of £1.6bn in April – compounds Sainsbury‘s problems after the store was pushed into third place in the sector by Asda Walmart last year.
New chief executive Justin King said the retailer would be cutting prices in a bid to regain market share and that it needed to “refocus” its efforts on customer needs.
“We are clear about the qualities and strength of the Sainsbury‘s brand. Our job is to provide even better quality products at good-value prices.
“We made our first moves on pricing earlier this month and customers are already seeing the benefit in their baskets. This is the first step in a much longer journey as we focus on improving our customer offer,” he added.
For industry reaction read the Business section in the May 21 issue of FARMERS WEEKLY.