The UK supermarket price wars continue to rage as Sainsbury’s reported a fall in its annual profits. The retailer’s underlying profits fell to GBP 587m, down from GBP 681m the previous year. Pre-tax profits, however, hit GBP 548m, making up for the GBP 72m loss reported last year. Sainsbury’s attributes its loss to a fall in property values as well as pressure to lower product prices in its stores. The chain’s chief executive Mike Coupe told the BBC that the situation is not likely to improve in the near term.
“Prices are actually 4 percent lower, would you believe, than two years ago and that’s a reflection of the fact that the market is fiercely competitive, and it will remain so for the foreseeable future,” said Coupe.
In an attempt to broaden its market appeal, Sainsbury’s signed on to buy Home Retail Group in April in a move that will give customers a choice of 50,000 products which they can pick up at 2,000 outlets within four years. The retailer also opened 15 Netto discount stores in partnership with Dansk Supermarked.
