Mon. Jan 24th, 2022

J Sainsbury’s said it would report higher profits than previously forecast for the year to March following a strong Christmas, with better-than-expected performance in its general merchandise and financial services businesses.

The UK’s second largest supermarket chain expects to make at least £ 720 million in underlying pre-tax profit, compared to a previous £ 660 million forecast made in July.

Low prices and higher operating cost inflation will be “counteracted by structural cost savings and stronger-than-expected grocery volumes,” the company said.

Argos, the general merchandise chain that increasingly operates from Sainsbury’s supermarkets, benefited from “stronger margins supported by transformational operating cost reductions” while the previously troublesome Sainsbury’s Bank “performed ahead of expectations”.

For the six weeks to January 8, grocery sales were 0.1 percent higher than last year, but 6.8 percent higher than the same period two years ago. Total sales were 2.9 percent lower than last year, but 2.4 higher than two years ago. The year-on-year comparisons were affected by the decision to close all stores on Second Christmas Day in 2021.

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