Sainsbury’s cuts hit £1bn More savings as profits dive
SAINSBURY’S is unleashing another £500million of cost cuts after a plunge in profits.
The supermarket chain is aiming to make the savings over three years starting from next March. The firm did not give details about where the money will come from. However, it is on top of another £500m of cuts already underway through “efficiency savings”.
Despite that, Sainsbury’s said its costs are due to rise over the next six months, fuelled by August’s 4% pay increase for store staff.
It came as Sainsbury’s announced profits fell 10% to £277m in the six months September 24, with sales down 1%.
Boss Mike Coupe said: “We have invested in the quality of our products while reducing prices.” He said the effect of the slump in the pound on its prices was “as yet uncertain”.
Asked if they would have to rise, Coupe said: “Our job is to make sure we do everything we can to mitigate or eliminate the impact on shoppers.”
He added that the firm’s high percentage of UK-sourced goods would help shield it from the impact.
Speaking hours after Donald Trump’s shock UK presidential victory, he said: “We are living in unprecedented and uncertain times.”
The supermarket’s share price tumbled 6.5% yesterday.
However, full year profits are set to be boosted by its £1.4billion takeover of
Argos and Habitat owner Home Retail Group.
Sainsbury’s already has 22 Argos digital stores in its supermarkets and plans to extend this to 30 by Christmas.
It hopes to ultimately roll out 200 new digital collection points overall across its stores, where customers can collect Tu clothing, eBay and DPD parcels.