As it also announced the resignation of chairman Sir Peter Davis and his replacement with Philip Hampton, Sainsbury warned it expected profits would be “significantly below” analysts’ forecasts of £505m.
It said reducing its prices had reduced margins, and moves to improve availability, including deferral of a planned depot closure and higher than average wastage levels, had increased costs. Trading out of its over-stocked position in non-food had also hit profits.
Sainsbury also announced poor trading figures for the first quarter of this financial year, with like-for-like sales for the 12 weeks to June 19 up 1%.
Chief executive Justin King said he would report on his review of the whole business with the second quarter results on October 19.