Sainsbury's suffered its first decline in sales since July last year in the 12 weeks to 24 April, according to data from Kantar Worldpanel.
Underlying profits fell to £587m for the 52 weeks to 12 March, down from £681m the previous year. Annual pre-tax profits were at £548m, compared with a £72m loss in the previous financial year, (a result of a writedown of £600m on the value of its properties). The supermarket’s shares fell 4% on the FTSE 100 following the latest results.
The chain said profits from day-to-day trading fell close to 14%, while general merchandise sales increased by 3.5% and making operating cost savings of £225m this year. Meanwhile, it reported a 0.9% decrease in like-for-like sales, with total retail sales growing by merely 0.4%.
But Sainsbury’s maintained its market share over the course of the year, while Morrison’s, Tesco and Asda market shares fell according to Kantar Worldpanel statistics, and the FTSE 100 company said it was pleased to have done so.
Chief executive Mike Coupe pointed to the competitive environment supermarkets operate in. "Ongoing pricing pressures and food price deflation have impacted our sales and operating margins. As a result, underlying profit and earnings per share are down this year versus last year."
"We continue to outperform our main supermarket peers and maintain market share in a competitive, deflationary environment. The market is competitive, and it will remain so for the foreseeable future," he said.
"Our core food business performed well, underpinned by our quality investment programme, our simpler pricing strategy and lower regular prices. We also saw strong growth in clothing and general merchandise, as well as in our convenience and online channels," added Coupe.
The chain, which is the second largest in the UK market, has proposed a full-year dividend of 12.1p per share, down from last years' payout of 13.2p per share.
Sainsbury’s agreed to acquire Argos-owner Home Retail Group in April for £1.4bn, which would allow customers to choose from more products and collect them within four hours, said the company. In addition, Sainsbury’s opened 15 discount retailing Netto stores in partnership with Dansk Supermarked, in order to capture this growing part of the market.