Sainsbury’s has reported its first loss in almost 10 years, although it continues to expand its convenience estate at a rate of up to two new stores a week.
The grocery multiple posted a loss of £72m for the year ending March 14 on the back of property writedowns and other one-off factors.
Like-for-like sales excluding fuel declined by 1.9%, while pre-tax profits fell by 14.7% to £681m, without taking the one-off costs into account.
However, the group’s c-store estate delivered sales growth of 16% over the year, with 98 new Sainsbury’s Local stores opening.
It has also identified new sites for new convenience and supermarket format trials in a bid to make its shopping experience more convenient.
Mike Coupe, Sainsbury’s chief executive, said: “The UK marketplace is changing faster than at any time in the past 30 years which has impacted our profits, like-for-like sales and market share.
“However, we are making good progress with our strategy, and our investment in price and quality is showing encouraging early signs of volume and transaction growth.”
David Gray, retail analyst at Planet Retail, said the results marked a “sharp departure” from the ‘good years’ of consistent profit. “The simple fact is that supermarket property assets are now worth far less, particularly sites that would have been originally earmarked for big-box,” he added.
“Even on an underlying basis, Sainsbury’s trading performance continues to slip, with like-for-like declines the new normal for a retailer that, only 12-18 months ago, was leading the big four performance-wise.”
However, he said its convenience portfolio, which is “large and growing fast”, gave it a structural advantage over rivals.