British supermarket chain Sainsbury's saw its 2013-2014 profits soar 16.3 % to 898 million pounds (1.09 billion euro) despite the "tough retail environment": like-for-like sales only grew 0.2 %.
Discounters spark price war
The challenging part of the previous fiscal year was the emergence of discounters like Aldi and Lidl, which have forced the major supermarket chains in the United Kingdom to lower their prices. "We will match the price activity of our competition - we always have", Sainsbury's CEO Justin King has stated.
He did however also state that it is not merely about price, as "quality, the provenance of sourcing is a big factor as well" and he believes that Sainsbury's has really shone this past year. General merchandise sales grew more than twice as fast as food, while its clothing brand also helped generate 750 million pounds (900 million euro) in sales.
The company remains vigilant about the future, warning that "conditions in the food retail sector are likely to remain challenging for the foreseeable future as customers continue to spend cautiously", King said. Investors showed their appreciation for the positive results and helped Sainsbury's share price to rise 1.92 %.