Sainsbury’s to invest £150m in price cuts
Sainsbury’s has announced a £150m investment in price cuts as it revealed a 2.1% fall in like-for-like sales.
Sainsbury’s released its interim results for the 28 weeks ending 27 September 2014, showing underlying profit before tax down 6.3% to £375m from £400m in 2013/2014. Underlying basic earnings per share were also down significantly, by -12.7% to 14.5p compared with 16.6p in 2013/2014.
The supermarket, alongside Tesco, Morrisons and Asda, has been hard-hit by the success of discount brands Lidl and Aldi.
To combat this, Sainsbury’s said it would invest £150m in reducing prices, half of which will fall in the second half of 2014/15 and the remainder in the first half of 2015/16.
Moreover, Sainsbury’s stated it would work closely with its suppliers to provide lower prices for it customers and “deliver value chain efficiencies which can be reinvested in price”.
Chief executive Mike Coupe said Sainsbury’s would continue to put customers first: “We will continue to differentiate ourselves from a position of strength by offering great products and services at fair prices, investing in the quality of our food and investing in price in areas where our customers tell us it matters most. By knowing our customers better than anyone else, we will continue to serve them through multiple channels and in ways that make their lives easier, regardless of changes in the market. Our colleagues will remain our greatest asset; we will invest in their training and development to ensure they can continue to deliver industry-leading service.”
David Tyler, chairman, said: “The UK grocery sector has become increasingly challenging in recent months. As a result, we have evolved our strategy and believe this will allow us to build on our heritage and past success, especially as it will be delivered by the most experienced management team in the industry.”
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