The UK’s third biggest grocer said underlying pre-tax profits fell 14.7 per cent to £681 million in the year to 14 March, on sales 0.9 per cent lower at £26.1 billion.
On a like-for-like basis, stripping out the effect of new stores, sales were down 1.9 per cent as the group came under pressure from discount rivals Aldi and Lidl.
Chairman David Tyler said the retailer was facing “unprecedented industry change” as people increasingly turn to cut-price rivals, as well as convenience stores and online shopping.
Sainsbury’s recorded a bottom-line loss of £72m after taking an accounting write-down to cover the lower value of its property estate.
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.
“However, we are making good progress with our strategy, and our investment in price and quality is showing encouraging early signs of volume and transaction growth.”
Following the drop in profits, Sainsbury’s cut its final dividend to 8.2p a share, from 12.3p last time, giving a full-year payout of 13.2p – down 23.7 per cent.