Sainsbury’s profits jump 13% with strong growth in non-food

Sainsbury's Local: £1bn business

Sainsbury's Local: £1bn business

Sainsbury’s pre-tax profits jumped by nearly 13% to £827m in the year to 19 March 2011 on the back of strong growth in non-food and its convenience business, which has racked up £1bn in sales.

Total sales rose 7% to £23bn, with like-for-like business, including VAT and excluding fuel, up 2.3%.

Sainsbury’s said non-food sales were growing at three times the rate of food and it is now the UK’s seventh largest clothing retailer.

Sainsbury’s Local, the convenience arm, has notched up sales of £1bn, while online grocery sales are reported to be up by over 20%. Sainsbury’s Click & Collect service, where customers order products on line to collect in store, is now on offer in over 160 branches.

During the year, Sainsbury’s opened six new food colleges with a target to train over 10,000 colleagues per annum. It also re-launched its Taste the Difference brand, worth £1bn in sales and has announced the biggest investment in own label is underway with the launch of 6,500 under a new ‘by Sainsbury’s’ brand.

Justin King, chief executive said: “Sainsbury’s has continued to perform well. Customer numbers are at an all-time high of 21m transactions every week, which is up 1m on last year, a clear indication of our growing universal customer appeal across all channels. We have added gross space of 1.5m sq ft to our store estate, creating over 6,000 new jobs with Sainsbury’s.

“Strong sales growth, combined with productivity savings and tight control on operating costs, have helped to deliver good profit growth. Our colleagues continue to deliver great service, exceeding our stretching customer service targets, and we are delighted to be paying our colleagues a bonus of around £60m.

“We expect the economic environment to remain uncertain over the coming year. We remain confident that our strategy, alongside continued strong operational performance, will enable the business to make further good progress.”