Sainsbury's profits rise 11%

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The Independent Online

Supermarket giant Sainsbury's today posted a better-than-expected 11.3 per cent hike in annual profits to £543 million.

Its underlying profits haul means 120,000 staff will share a bonus pot of £60 million, up from last year's £47 million payout.

The UK's third biggest supermarket, which is celebrating its 140th anniversary, said like-for-like sales rose 4.5 per cent, excluding fuel, in the year to 21 March.

Sainsbury's hailed its ability to appeal to "savvy" shoppers in the recession as it now sees more than 18 million customers pass through checkouts each week.

But chief executive Justin King said it had been a "very challenging period for the UK retail industry".

Today's profits came in slightly higher than the £526 million expected in the market.

While the growth is less than half the 28 per cent surge seen the previous year, it compares well with the 8.8 per cent hike in annual profits seen at market leader Tesco and the 7 per cent rise at Morrisons.

Sainsbury's has been stealing market share from Tesco as value-conscious consumers shop around for the best deal, with the latest TNS Worldpanel data showing Sainsbury's now accounts for 16.3 per cent of the sector.

Its Jamie Oliver-led Feed Your Family For A Fiver campaign has been well received by shoppers, while sales of its basics range have soared - up more than 60 per cent year on year in the final quarter.

Mr King said: "Our universal customer appeal and continued investment in price and quality have been fundamental to our growth, catering for a range of changing customer needs and trends.

"Over the past 12 months consumers have become increasingly 'savvy' and have responded to rises in the cost of living by making significant changes to the mix of products they buy."

The group's product range has provided customers with the option to "change what they buy, rather than where they shop", he added.