Sainsbury's ramps up tech investment as profits plummet
Sainsbury's has reported a 41.6% fall in pre-tax profits, weighing in at £239 million, for the 52 weeks to 9th March 2019. Revenue rose slightly to £29 billion, from £28.5 billion last year.
The grocery giant splashed out £46 million in prepping for its planned merger with Asda, which was blocked last week by the CMA. That was part of a series of one-off costs totalling £396 million, which also included provision for pension changes. When stripping these out, profits for the year to 9th March were 7.8% higher than the previous period.
Sainsbury’s said that it was accelerating its investment in technology. Highlights included: rolling out SmartShop self-scan to over 100 supermarkets; Pay@Browse available in 162 Argos stores, enabling customers to pay without queuing; Trialling digital Nectar in Wales ahead of a broader roll-out later in the year; Testing out the UK’s first checkout-free grocery store.
“We will increase and accelerate investment in the core business, investing to improve over 400 supermarkets this year. £4.7 billion of our revenue now comes from our online businesses and we are increasing investment in technology to make shopping across Sainsbury’s, Argos and Sainsbury’s Bank as quick and convenient as possible,” said Chief Executive Mike Coupe.
“We will also continue to strengthen our balance sheet and are making a new commitment to reduce net debt by at least £600 million over the next three years. I am confident in our strategy and also clear on what we need to do to continue to evolve the business in a highly competitive market where shopping habits continue to change,” he added.