Sainsbury's sparks industry concern with 40% bottom-line profit fall

Galtero Lara
Noviembre 9, 2018

Sainsbury's says the consumer spending outlook is "uncertain" as retailers gear up for the crucial Christmas trading season amid a crisis facing the high street. This beat market expectations of £278 million and came after it took £121 million of costs out of the business during the period.

Halfords also used the publication of its six-month figures on Thursday, which showed sales up but profits falling, to warn that shoppers were holding back on discretionary items.

When exceptional costs, such as those linked to the restructuring of its shop management teams and its proposed merger with Asda, are taken into account its statutory pre-tax profits fell sharply from £220 million to £132 million.

Sainsbury's saw the summer heatwave boost sales over its second quarter, with like-for-like growth including Argos, but excluding fuel, accelerating to 1%, up from 0.2% in the previous three months.

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Sainsbury's boss, Mike Coupe, said: "We have to strike a note of caution, because we are in unprecedented times in my experience".

He said the group continued to "engage constructively" with the competition watchdog amid an in-depth probe of its planned tie-up with Asda.

He added: "Sainsbury's admits that consumer uncertainty will make the crucial second-half hard, and that clothing is fiercely competitive".

"However, its confidence in meeting forecasts for underlying full-year profit of £634m is reassuring".

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