UK: Sainsbury's FY clothing sales grow faster than food
- FY net profit was up 2.7% to GBP614m (US$950.4m)
- Sales were up 4.6% at GBP25.63bn
- Clothing sales grow at over twice the rate of food
UK supermarket retailer Sainsbury's has reported higher annual profits after "outperforming" its rivals, and said its non-food offer - which includes clothing - "goes from strength to strength."
The retailer today (8 May) said net profit was up 2.7% to GBP614m (US$950.4m) for the year to 16 March.
On a reported basis, pre-tax profits fell 1.4% to GBP788m thanks to fewer property disposals. However, excluding property proceeds, Sainsbury's said underlying pre-tax profits increased 6.2%.
Sales were up 4.6% at GBP25.63bn. Like-for-like sales excluding fuel but including VAT increased 1.8%.
The retailer said its general merchandise and clothing sales are growing at over twice the rate of its food business and gaining market share.
"In February, we reached the milestone of GBP1bn annual sales from general merchandise, reflecting the investment we have made in the quality of our offer, in-store experience and non-food space," it added.
Chief executive Justin King said Sainsbury's focus on helping customers "Live Well For Less is delivering good growth in sales and profit."
He added: "Whilst we see no near term change in the current economic situation, we remain confident that by continuing to invest in our long-standing strategy and by understanding and helping our customers, we are well positioned for future growth."
The retailer also confirmed plans to take full ownership of its Sainsbury's Bank venture with Lloyds Banking Group.
Retail analysts have described Sainsbury's performance as "impressive".
George Scott, consultant at Conlumino, noted: "Investment in its well-balanced brand proposition continues to have strong traction among hard-pressed British consumers in a polarised market."
He also noted the future scope for growth in the retailer's general merchandise and clothing business, which is "relatively immature compared to its supermarket competitors."
While Jon Copestake, retail analyst at The Economist Intelligence Unit, pointed out that: "The news of 33 consecutive quarters of like-for-like growth comes against a backdrop of plunging UK retail sales in April reported by the BRC and some high profile write-downs from key competitor Tesco."
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