Sainsbury's profits beat expectations

11th Nov 2009 07:02

Supermarket Sainsbury's posted a healthy rise in profits in the 28 weeks to October 3 as shoppers continued seeking bargains in tough economic times, but repeated a warning that lower food price inflation will affect growth in the second halfPre-tax profits rose to £342m from £258m ahead of expectations, as total sales climbed by 3.7% to £11.15bn from £10.76bn. Underlying pre-tax profits climbed by 18.5% to £307m from £259m. Sainsbury's will pay an interim dividend of 4p, compared with 3.6p a year ago.Sales growth excluding fuel totalled 7.9%. The sharp fall in oil prices between the two periods accounts for the difference with the figure including fuel. Like-for-like sales, which strips out the impact of new openings, climbed by 5.7% excluding fuel.Sales at Sainsbury's have been boosted by promotions such as the 'Feed Your Family for a Fiver' campaign and the expansion of its basics range.Chief executive Justin King outlined the company's ambitious growth plans, but also warned of the effects of reduced food price inflation.'The time is right to accelerate our growth plans,' he said, adding that the company intends to grow gross space by 15% in the two years to 2011.