J Sainsbury in bullish mood

J SAINSBURY has pledged to dominate the grocery sector over the next decade, after reporting a stellar 11.3 per cent pre-tax profit hike to &pound;543m in the year to 21 March.<br /><br />Chief executive Justin King said the group now has &ldquo;the greatest growth potential of any grocery retailer in the next ten years&rdquo;.<br /><br />Sainsbury&rsquo;s has focused on marketing its budget own-brand ranges to snatch market share from upmarket rivals Marks &amp; Spencer and Waitrose while fending off ultra-cheap Lidl and Aldi, as customers have cut spending during the recession. Its &ldquo;Basics&rdquo; range of budget foods now makes up 3 per cent of its total sales compared with 2 per cent in 2008.<br /><br />Overall, sales rose 5.7 per cent to &pound;20.4bn during the year thanks to the recession-focused strategy. The underlying retail profit margin was up 26 basis points to a healthy 3.26 per cent, although larger rival Tesco still boasts a UK margin of 6.2 per cent.<br /><br />King added customer numbers have risen to 18m a week, from 14m when he joined five years ago.<br /><br />He promised an expansion of the group&rsquo;s retail space by 5 per cent this year, after the 4 per cent expansion last year, as part of the bid to dominate growth in the sector.<br /><br />The group, which this year celebrates 140 years in business, unveiled a bumper 10 per cent dividend boost to 13.2p a share along with the confident results.<br /><br />It confirmed Sir Philip Hampton is to step down from his role as chairman to focus on his high-profile job as chairman of RBS, and said senior independent director John McAdam is now hunting for a replacement.