UK: Supermarket price war sees Sainsbury's profits slump
But the company also announced it was to create around 5,000 jobs over the coming year with new investment in its home shopping service and store expansions.
The jobs will be created as the Homebase DIY to supermarkets business attempts to reverse the slide.
The group reported profits before tax, exceptional costs and goodwill were down to £580m, from £755m last year. Sales and profits jumped at Homebase and its US business, Shaw's, but the UK supermarkets business saw profits fall, hit by price competition and higher staff and property costs.
Sir Peter Davis, the group's newly installed chief executive commented: 'These results demonstrate that while we have two very strong businesses in Homebase and Shaw's ... we need to focus our efforts on our core supermarket business.'
To further help regain ground against key competitors such as Tesco, Sainsbury plans to speed up the roll-out of its home shopping service, Sainsbury's To You.
The service is currently run through nine stores, but will be rapidly expanded to be available to 60 per cent of Sainsbury's customers by the end of this year, Sir Peter said.
Warehouse-sized centres are being planned to provide products for the home delivery business, including a 300,000 sq ft centre in west London due to be opened in July.
Sir Peter said around 5,000 jobs would be created over the 12 months across the group, partly through the expansion of the home shopping business and partly through the opening of new stores.
Over the last year the group opened 20 new stores. This year it plans to open a further 13 and extend 35 others.
To help fund its investment Sir Peter said he hoped to rationalise the group's offices, including selling its current headquarters in central London. Including the headquarters, the group has 14 office sites in London and Sir Peter said he hoped to move quickly into new headquarters.
But he dismissed rumours the group was considering selling its successful US business to fund investment in the UK.
While he declined to give any cost-cutting or growth targets for the supermarkets business, Sir Peter struck a confident note pointing out the group was maintaining its underlying dividend to shareholders at 14.32p.
Sir Peter said the group would continue to offer 'fair pricing and value for money', but would not make cheap prices the core of its promotions. 'You won't see us launching a big price campaign, but we will always be price competitive,' he said.
As the popularity of strict low-carbohydrate diets appears to be in decline, a more moderate alternative has been building in the consumer consciousness. Already popular in Australia, the Glycemic Ind...
Supermarket Tesco further increased its lead in the UK grocery market in the twelve weeks to 24 April 2005, according to market analysts TNS. Sainsbury managed a small rise, while Wal-Mart's Asda and ...
UK supermarket group J Sainsbury has announced the acquisition of SL Shaw Ltd, a neighbourhood convenience store operator with five stores in the south east of England....
Any move from Asda will be an important catalyst in the race to land Somerfield. The Wal-Mart owned group could well see its acquisition target as an important route into the ever-expanding convenienc...
Supermarket chain Tesco has announced a new food labelling system, with 'nutritional signposts,' which it says will make it easier for shoppers to make healthier choices....
Locally owned food retailer CBA is Hungary's biggest supermarket, according to the Budapest Business Journal, which cited statistics compiled by AC Nielsen for trade journal Mai Piac....
Not content with pocketing one in every three pounds spent on groceries in the UK, the supermarket giant Tesco has now become the first British retailer to smash the £2 bn ($3.78bn) profit barrier. Ho...
Tesco, the UK's biggest supermarket chain, has today (Tuesday) reported a 20.5% rise in pre-tax profits to £2.029bn (US$3.84bn) for the 52 weeks ended 26 February 2005....
- 2017: three major drivers of M&A strategy
- The food market in 2017 - consumer trends and M&A
- just-food 2017 Survey - your thoughts on growth
- Food market in 2017: need-to-know US trends
- 2017 - what will shape the UK food sector?
- Premier Foods issues profit warning
- UK's Bakkavor plays down IPO "speculation"
- Kellogg to slash 250 jobs
- Mondelez sells Vegemite to Bega
- Nestle mum on Mead Johnson takeover talk