UK supermarket operator J Sainsbury has announced the appointment of Justin King as the group’s new chief executive.
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King, who is currently head of Marks and Spencer’s food business, is to take over from current CEO Peter Davis on 29 March 2004, when Davis will become chairman. Besides working for M&S, King has also spent seven years at rival supermarket chain Asda.
The news of the appointment was released with J Sainsbury’s interim results for the 28 weeks to 11 October. The company reported underlying profit before tax up 7% to £366m (US$622m) for the first half, before exceptional items and amortisation of goodwill.
Sales rose 1.0% to £9.8bn, including VAT and US sales tax, although sales rose 2.1% at constant currencies.
The group’s Sainsbury’s Supermarkets UK business recorded a 1.8% rise in total sales to £8.2bn, while like-for-like sales rose 0.1%, including petrol. Underlying operating profit was up 9.4% to £313m.
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By GlobalDataSainsbury said it delivered £110m of cost savings at its UK supermarkets business in the first half and was confident of achieving cumulative savings of £710m by March 2004 and £960m by March 2005.
Sainsbury to You, the chain’s online grocery retailer, registered a sales increase of 35%. Losses at the unit were substantially reduced to £10m in the first half, compared to a loss of £19m a year earlier. The company said it expects to break even by March 2004.
Meanwhile, at the group’s US supermarket operation, Shaw’s, total sales were up 2.7% to $2.5bn. Underlying operating profit rose 9.1% to $120m. The company said it is carrying out significant store development activity and expects a 12% increase in selling space in 2003/04.
“We expect the rate of pre-tax profit growth for the rest of this year to continue to reflect the unprecedented level of change we are driving through to ensure our business is competitive longer term. Despite all the challenges this year we expect to deliver another year of progress. We are clear on the opportunities that lie ahead for Sainsbury’s. The real benefits of our recovery will come through as we come to the end of our transformation programme in Summer 2004, providing the platform for accelerating sales growth thereafter,” said CEO Davis.
