LFL sales (excluding fuel) were up 4.5 per cent, of which 0.5 per cent was contributed by extensions. This LFL growth was slightly above Sainsbury’s medium-term planning assumption of between three and four per cent, and reflected continued improvement throughout the year, with LFL growth of 3.4 per cent in quarter 1, 4.3 per cent in quarter 2, 4.5 per cent in quarter 3 (4.9 per cent VAT-adjusted), and 6.2 per cent in quarter 4 (7.0 per cent VAT-adjusted). Online sales increased by over 25 per cent and now represents a £500 million annualised business.
|
Sales (including VAT, including fuel) for the 52 weeks to 21 March 2009 |
2009 % |
2008 % |
|---|---|---|
| Like-for-like sales (Easter-adjusted) | 4.5 | 3.9 |
| Removal of Easter adjustment1 | (0.8) | 0.4 |
| Net new space (excluding extensions) | 1.0 | 1.4 |
| Total sales growth | 4.7 | 5.7 |
- Like-for-like sales growth has been Easter-adjusted for comparative purposes. 2008 included two Good Friday trading weeks and one Easter Sunday trading week. 2009 included one Easter Sunday trading week only.
Net new space (excluding extensions) contributed 1.0 per cent to total sales growth (excluding fuel). Sainsbury’s added a gross 665,000 sq ft of new space (net 512,000 sq ft after disposals and closures), which represents a gross increase of 4.1 per cent (net 3.2 per cent) since the start of the year. Sainsbury’s opened 13 new supermarkets during the year, including two replacement stores, and completed 21 supermarket extensions and 13 refurbishments. In the convenience estate, it opened 16 new stores, disposed of 57 stores, as announced in March 2008, closed one store and refurbished four stores.
|
Store numbers and retailing space |
Supermarkets Number |
Supermarkets Area 000 sq ft |
Convenience Number |
Convenience Area 000 sq ft |
Total Number |
Total Area 000 sq ft |
|---|---|---|---|---|---|---|
| As at 22 March 2008 | 504 | 15,495 | 319 | 696 | 823 | 16,191 |
| New stores | 13 | 266 | 16 | 40 | 29 | 306 |
| Closures/disposals | (2) | (50) | (58) | (103) | (60) | (153) |
| Extensions/refurbishments/downsizes | – | 360 | – | (1) | - | 359 |
| Reclassifications1 | (13) | (97) | 13 | 97 | - | - |
| As at 21 March 2009 | 502 | 15,974 | 290 | 729 | 792 | 16,703 |
| Memorandum | ||||||
| Extensions | 21 | 346 | – | – | 21 | 346 |
| Refurbishments/downsizes | 13 | 14 | 4 | (1) | 17 | 13 |
| Total projects | 34 | 360 | 4 | (1) | 38 | 359 |
- Following the recent review of the convenience mission, 13 stores previously classified as supermarkets will now operate under the convenience fascia.
In March 2009, Sainsbury’s announced the acquisition of 24 stores from the Co-operative Group, of which 19 are expected to operate as supermarkets. These stores are all expected to be converted in the first half of the year and will be slightly earnings-dilutive in 2010, with the more significant impact in the first half. Gross space growth of 5 per cent is expected in 2010, weighted towards new stores following this acquisition. Net new stores are expected to contribute 2.0 per cent to total sales growth (excluding fuel) in 2010, weighted more towards the second half.
Underlying operating profit
Underlying operating profit increased by 15.1 per cent to £616 million (2008: £535 million) reflecting the good sales performance and a 26 basis point improvement in underlying operating margin to 3.26 per cent for the year (2008: 3.00 per cent). The rate of improvement was consistent across the first half and the second half. Sainsbury’s has driven operational gearing from higher sales volumes and the delivery of cost efficiency savings which have offset over 75 per cent of total cost inflation as well as supporting sustained investment in the customer offer. Sainsbury’s expects cost inflation to be at the higher end of its medium-term expectation of between two and three per cent in 2010, offset by a similar level of savings as in 2009.
|
Underlying operating profit for the 52 weeks to 21 March 2009 |
2009 |
2008 |
|---|---|---|
| Underlying operating profit (£m)1 | 616 | 535 |
| Year-on-year operating profit growth (%) | 15.1 | 24.7 |
| Underlying operating margin (%)2 | 3.26 | 3.00 |
- Underlying profit before tax from continuing operations before underlying net finance costs and underlying share of post-tax results from joint ventures.
- Underlying operating profit divided by sales excluding VAT.