Fresh food key to Sainsbury’s profit growth

Britain’s third largest supermarket, Sainsbury’s, increased pre-tax profits by 7% to £712m in the year to 17 March 2012.

Total sales (including fuel and VAT) increased by 6.8% to £24.511bn, with like-for-like sales growth of 4.5%.

While Sainsbury’s general merchandise and clothing businesses continued to grow faster than its food business, the supermarket said fresh food remained central to its success and was a key “battleground” for UK supermarkets.

There was strong growth in sales of its own label ranges, with Taste the Difference up 8.2% and basics up 6.8%. But while there was a focus on value ranges, it said it remained committed to welfare and values.

Sales of fairly traded products hit £288m, and were on course to meet the £1bn target by 2020, a statement said. “We are the UK’s leading retailer of Freedom Food products, which ensures animals are raised to rigorous and higher RSPCA welfare standards. We offer both the widest range of Freedom Food products with over 300 lines, and sell more than any other retailer, with over 50% market share.”

Convenience and online also performed well. Its convenience business was worth £1.3bn and online, which was growing at 20% a year, was worth £0.8bn.

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