Sainsbury's annual sales up 6.8%

Sainsbury's hailed the success of its price-matching scheme as it delivered a better than expected rise in annual profits.

The UK's third largest supermarket, which has more than 1,000 stores, said underlying profits increased 7.1% to £712 million in the year to March 17, beating City forecasts.

The group said overall sales excluding VAT rose 5.6% to £22.3 billion, taking its market share to the highest level for nearly a decade at 16.6%. It says the chain was helped by its Brand Match price scheme, which guarantees to match Asda and Tesco on 14,000 branded goods.

However, the chain, which opened 73 Local convenience stores last year as part of 1.4 million sq ft of new space, said it will slow its rate of store expansion from just over 7% to about 5% in the current financial year.

Sainsbury's Chief Executive Justin King said: "We are succeeding by understanding what our customers want, supporting and inspiring them to Live Well For Less. Delivering quality and value is a compelling offer, in tune with what today's savvy shoppers want.

"Brand Match, combined with our use of coupon-at-till, has improved Sainsbury's price perception whilst retaining the benefits of our heritage in quality and service...

"Whilst the wider economic situation remains uncertain, we remain confident that our clear strategy, market insight and strong values will enable us to make further progress both in our core food and non-food businesses, as well as new channels and services in the year ahead."

In the 52 weeks, leading up to March 12, 2012, Sainsbury's has announced it has increased its market share by 16.6 per cent, the highest for almost a decade.

The supermarket's Taste the Difference range is also up 8.2 per cent and its basics range has increased by 6.8 per cent.

Supermarket chain Sainsbury's has announced total sales, including VAT, are up 6.8 per cent to £24,511 million.

Underlying profit before tax is also up 7.1 per cent to £712 million.