Sainsbury's pre-tax profit falls 8%

Sainsbury's like-for-like store sales fell 1% in its first-half

Image Sainsbury's like-for-like sales fell 0.6

Coupe also reported that total transactions across the group had increased by almost 3% to 26 million a week during the 12-month period.

It is the third year of underlying profit decline for the supermarket which made £581mn in the year to March 11, down from £587mn in the previous year. If we were Coupe we would be very conscious that for all the ambitious plans in developing general merchandise, Sainsbury's core proposition is food retailing.

Support services company Carillion said on Wednesday that trading conditions have remained largely stable since its full-year 2016 results in March and it has made a promising start to the year.

However, Sainsbury's admitted that while it had grown convenience sales by 8%, supermarket sales declined by almost 2%.

Already, 59 Argos digital stores and 207 digital collection points have been introduced into Sainsbury's own supermarkets, resulting in a 2% uptick in supermarket sales where there is an Argos digital store present.

Sainsbury was pressured by the German-based supermarkets in the first quarter of the year shedding as much as 0.6% on the company's like-for-like sales for the full year.

"Our food business remains resilient in a challenging market and we continue to innovate in quality and to invest in price", Chief Executive Officer Mike Coupe said in the statement.

He added: "The trick is still to make the Argos acquisition work, and in this it makes sense for the group to keep forging ahead with its integration efforts".

After more than two years of deflation, food and fuel prices are starting to rise, driven by the devaluation of sterling and commodity price increases, and benefiting food retailers. It also said it would speed up a plan to open 250 Argos Digital stores in its supermarkets. Sainsbury's was next with 1.7% growth, which Kantar said was its best performance since June 2014.

Across Europe, the French Cac 40 fell 0.0.6% while the German Dax rose 0.16%.

Sainsbury's has warned over a "challenging" market and price pressures as it posted a 8.2 per cent decline in annual profits.

The FTSE 100 supermarket sounded a note of caution going forward, pointing out that the market remained competitive, and that the impact of cost price pressures was uncertain.

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