Sainsbury’s has reported its first loss for nearly a decade on the back of writedowns in the value of its stores.
Britain’s third largest supermarket suffered one-off charges of £753m linked to writedowns in the value of its supermarkets and land that it no longer wants to build new stores on.
As a result of the writedowns, Sainsbury’s endured a pre-tax loss of £72m in the year to 14 March, compared with a profit of £898m last year.
Like Tesco, Sainsbury’s has come under pressure from the discounters, weak industry sales volume growth and deflation. It suffered a 1.9% drop in like-for-like sales for the year.
The supermarket has focused on opening smaller convenience stores, which are enjoying better trading than larger format stores. During the year, it opened 98 convenience stores and reported more than 16% convenience sales growth.
Sainsbury’s chief executive Mike Coupe said: “The UK marketplace is changing faster than at any time in the past 30 years which has impacted our profits, like-for-like sales and market share.”
The news comes a fortnight after Tesco revealed a £6.4bn pre-tax loss in its full-year results - which was driven by a massive £4.7bn writedown on the value of its property portfolio.