Sainsbury‘s, Britain‘s second biggest retailer, cautioned that cost price pressures would weigh on its business this year as it reported a small decline in underlying sales over the last three months.
An almost 18 per cent devaluation of the pound versus the dollar and a 12 per cent fall against the euro since the Brexit vote is making life harder for Britain‘s supermarkets.
Sales at supermarket stores open over a year fell 0.5 per cent, excluding fuel, in the nine weeks to March 11th, the last quarter of its financial year. That compared to analysts‘ forecasts ranging down 1 per cent to up 0.3 per cent
After adjusting for this year‘s later timing of Mother‘s Day and Easter the outcome was in line with its third quarter when like-for-like sales rose 0.1 per cent, it said.
The results showed a strong performance from Argos, where underlying sales increased 4.3 per cent, accelerating from growth of 4 per cent in the previous quarter and ahead of analysts‘ forecasts.
Analysts are on average forecasting a 2016-17 pretax profit of £578 million, which would be a third straight year of decline, despite the boost to earnings from the Argos deal. – Reuters
