JUSTIN King, the outgoing boss of Sainsbury’s, has played down his rivals’ price cutting tactics as a “skirmish” and insisted the supermarket will be as competitive as ever after posting forecast-beating profits.
Britain’s third-largest grocer is the only one of the big four to not have formally committed to hundreds of millions of pounds of price cuts.
It insists instead that it can compete with parts of its strategy that differ from its rivals’ efforts, such as its Brand Match scheme and its focus on quality and food provenance.
“Viewing value through the single dimension of price completely misreads where the customer is,” said King, who will hand over the reins to commercial director Mike Coupe in July.
“If everybody thinks it’s all about price, the gap we’re going to be able to enjoy on the other things that are important to customers will widen,” he added.
King said the group is nevertheless keeping a close eye on price and that it would continue to match its rivals.
His comments came as Sainsbury’s reported a 5.3 per cent rise in underlying pre-tax profits to £798m in the year to 15 March, ahead of analyst expectations of £782m.
Capital expenditure for the year at £888m was below its £1.1bn target.
Like-for-like sales grew by 0.2 per cent and the group expects to achieve a similar pace this year.
With analysts forecasting profits to fall to about £762m, King denied that he was getting out at the top and said that his succession had been well planned over the longer term.