‘Big Four’ grocer Sainsbury’s saw underlying profits slump by £41m to £238m for the six months to 21 September 2019.
The retailer attributed the decline in profits to the combined impact of its £500m cost savings scheme and higher marketing costs.
In addition to that, a series of store closures lead to a total one-off cost of £229m during the first half of the year, which resulted in statutory profit before tax of £9m – a 91% decline compared with the £107m it recorded only a year prior.
Group sales fared better during the period, though still declining 0.2% to £16,856m, and both retail sales and like-for-like sales decreased by 0.6% and 1% respectively.
CEO Mike Coupe said: “We have created positive momentum across the business through strategic investments in our customer offer. We have lowered prices on every day food and groceries, launched a range of value brands and are more competitive on price than we have ever been.
“We are investing in hundreds of Sainsbury’s and Argos stores, introducing new products and services and continually improving service and availability. As a result, customer satisfaction has increased significantly year on year.”
He added: “We have set out our plan to create one multi brand, multi-channel business. This will make the combined Sainsbury’s and Argos offer much more accessible for customers and gives us the opportunity to make our business more efficient.”
It comes after Sainsbury’s announced plans for a store estate overhaul, which will see it close over 100 stores, while also opening and relocating others, as it aims to save £500m over the next five years.
Some 40 convenience stores will also shutter, but Sainsbury’s added it has plans to open 110 more.