British supermarket chain Sainsbury’s is happy with its first six months’ result: turnover grew 17 % but its profit dropped 10 %. Subsidiary chain Argos generated most of the additional turnover.
Small like-for-like growth
Sainsbury’s’ turnover grew to 16.3 billion pounds (18.4 billion euro) in the first six months of 2017. The company says its focus on quality, low prices and innovations have led to this faster-than-average growth. However, its like-for-like turnover growth was only 1.6 %, because the majority comes from the 112 new Argos stores. The company did experience a 7.2 % online growth.
Despite that strong turnover growth, its pre-tax profit dropped 9 % to 251 million pounds (280 million euro), because of lower prices, higher wages and a loss at Argos. The company did manage to cut more costs than expected and aims to save 540 million pounds (610 million euro) by the end of next year.
“We have delivered a good performance across the Group in the last six months, with more customers choosing to shop at Sainsbury’s in the first half than ever before. We are now three years into delivering our differentiated strategy and are seeing clear results,” CEO Mike Coupe said.