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Sainsbury’s profits slump as boss Mike Coupe insists: ‘I’m in it for the long haul’

Profits at Sainsbury’s slid 8.2 per cent last year as food sales continued to fall – but its boss insisted he will power ahead with his turnaround plan.

Chief executive Mike Coupe, who has ditched most of its promotions and multi-buy offers, said he is looking to rebuild profitability over the long haul rather than seeking a quick fix, and claimed a price war with rivals is simply ‘smoke and mirrors’.

Annual results published yesterday showed food sales dropped 0.5 per cent in the year to March 11.

Sainsbury’s boss Mike Coupe, who has ditched most of its promotions and multi-buy offers, said he is looking to rebuild profitability over the long haul rather than seeking a quick fix

Coupe said: ‘We think running our business on a less commercial basis, with less multi-buys, is the right strategy because we think it means that customers can choose what they buy.

‘You’ve all had the experience where you’ve bought the second one free and it still sits in your cupboard five years later and you never actually use it or consume it.

‘We think it’s right to give our customers the opportunity of buying what’s right for them rather than presenting them with products they would not necessarily buy as twos or threes or fives.’

It came as Tesco yesterday revealed it had cut the prices of hundreds of fresh products. Rival Morrisons vowed to slash the cost of 1,067 products.

Coupe questioned why rivals were making their announcements about price cuts on the day of his firm’s annual results. ‘We constantly challenge ourselves to do something that’s different,’ he said. ‘All of this stuff is smoke and mirrors.’

Sainsbury’s pre-tax profits slid 8.2 per cent to £503million in the year to March 11. That was despite a 12.7 per cent rise in group sales to £29.1billion, which came partly thanks to the acquisition of Argos last year.

Sales across Sainsbury’s stores open for more than a year fell 0.6 per cent. The slight increase in overall sales was largely due to the strength of Sainsbury’s Local convenience stores, and the rise of internet shopping. Convenience sales were up 6.5 per cent while online sales increased 8.2 per cent.

Argos performed particularly well, with sales for the 24 weeks to March 11 increasing 4.1 per cent.