Sainsbury’s has claimed it is winning over customers from its rivals after reporting higher than expected profits.

The country’s second-largest supermarket chain announced on Thursday its underlying pre-tax profits were £701m for the 2022/23 financial year.

The figure is up 1.6% on the previous year’s haul of £690m – and ahead of company forecasts that it would make between £670m and £700m.

It comes amid fierce competition from rivals, with Sainsbury’s crediting the gains to its Aldi Price Match campaign and its move to provide better prices to Nectar card holders.

The firm said: “In January we doubled the number of products price matched to Aldi, with over 600 products now included across fresh, grocery and household ranges.

“We also made it easier for customers to identify lower prices in store by moving all of our entry price point products into a single brand, Stamford Street and by introducing Low Everyday Prices, which has replaced Price Lock and includes over 1,000 products, primarily branded.”

Total sales for the 12 months to the end of March were £36.3bn, up 3.4% year-on-year.

Sainsbury’s also said it expects “strong profit leverage in the year ahead”, with growth of up to 10% and underlying profit of up to £1.06bn.

It comes after the company announced cost-cutting plans in February, including 1,500 job cuts.

The preliminary results on Thursday said the chain launched nearly 1,200 new products during the year, while sales of its premium Taste the Difference range grew by 12%.

Much of the growth came from grocery sales, which were up more than 9%.

However, clothing was down 6.4%. The company said there had been “a bit” of disruption to supplies following attacks on shipping in the Red Sea region.

Read more from business:
Suez Canal traffic falls 66%
Meta shares take $125bn hit
Premier League signs deal with Guinness

Like-for-like sales, excluding fuel, rose 4.8% in the fourth quarter.

However, this was the firm’s slowest growth for more than a year and down on the 7.4% rise in the previous three months.

Statutory pre-tax profits were £277m in 2022/23, down more than 15%, largely due to a restructuring of the company’s banking division.

Chief executive Simon Roberts said: “We said we’d put food back at the heart of Sainsbury’s and that’s what we’ve done. Our food business is firing on all cylinders.

“We have the best combination of value and quality in the market and that’s winning us customers from all our key competitors, driving consistent volume market share growth as more customers choose us for their weekly shop and all their special occasions.”

Last year Sainsbury’s reported a 5.4% rise in sales but a 5% fall in pre-tax profits.

English football’s top flight is toasting a £40m sponsorship deal with Guinness after the Diageo-owned brand saw off competition from Heineken.

Sky News has learnt that the Premier League has informed its 20 clubs, which include Everton, Manchester City and Sheffield United, that it is backing a £10m-a-year agreement beginning next season.

The deal, which has not yet been formally signed, represents a big financial uplift on the Premier League’s existing partnership with Budweiser’s owner, AB InBev.

Guinness has historically been more closely associated with promoting itself through an association with rugby union – through the sport’s Premiership and Six Nations competitions – than football.

One Premier League club executive said they had been told the Guinness deal was valued at over £41m over its four-year duration.

Budweiser has been associated with the Premier League for the last five years, while it has also been a principal sponsor of the FA Cup.

The proposed agreement comes at a time of unprecedented scrutiny of the Premier League’s finances after its failure to reach a redistribution settlement with the English Football League.

Read more from business:
Post Office scandal ‘extends beyond Horizon’
TikTok ban in US moves a step closer
Lloyds profits plunge following record year

This week’s second reading of the Football Governance Bill represented another step towards the creation of an independent watchdog for the sport.

Richard Masters, the Premier League chief executive, has warned in the last fortnight that more intense regulation will risk damaging the English football pyramid.

The Premier League and Diageo declined to comment.

Shipping traffic through the vital Suez Canal artery in Egypt has plunged by 66% since cargo was forced to divert due to attacks on vessels, according to official figures.

The data, from the UK’s Office for National Statistics (ONS), covered the period from mid-December to the beginning of April.

It is important as it represents the scale of disruption to supplies through the artificial channel linking the Mediterranean Sea to the Red Sea since Iran-backed Houthi fighters started firing on ships in the run-up to Christmas last year.

There are fears that soaring costs for insurance, fuel and wages risk stoking a fresh wave of inflation as the diversion to Europe from destinations such as manufacturing powerhouse China, around the southern tip of Africa, adds up to 14 days to transit times.

Separate ONS data covering the pace of price increases is yet to show any real impact on the UK economy but the Bank of England is among institutions monitoring the situation as a number of companies report a hit from higher costs.

Container prices, for example, rose by more than 300% as the disruption gathered pace early this year.

Houthi fighters based in Yemen have been targeting ships which, they claim, have links to Israel.

They argue that they are acting in sympathy with Palestinians and a number of attacks have found their targets despite a US-led naval operation to protect vessels in the Red Sea.

The vast majority of major shipping companies have, for some months, used the diversion around the Cape of Good Hope.

The ONS said volumes started to increase in December 2023 and throughout the first weeks of 2024, more than doubling levels observed in February 2023.

“By the first week of April 2024 (week 14), the volume of cargo and tanker ships through the Suez Canal was 71% and 61% below the level of ship crossings seen in the previous year, respectively.”

It added that weekly crossings through the Strait of Hormuz, off the coast of Iran between February and April, showed a “significant decrease” compared with previous years.

It noted that shipping journeys were particularly low between weeks five and 10, with an average 23% reduction in crossing volumes compared with the same weeks in the previous year.

This was mainly due to lower tanker crossings, it noted.

Read more:
Why are the Houthis attacking ships in the Red Sea and what does it mean for inflation?
Iranian navy seizes tanker in Gulf of Oman

The prospect of more perilous journeys for tankers has been a factor behind rising oil prices.

Brent crude, which had been trading around the $80 a barrel mark at the start of the year, rose as high as $91 earlier this month amid the see-saw of tension across the conflict in the Middle East.

It culminated in tit-for-tat attacks between Israel and Iran.

It is currently trading at $88, reflecting the lack of escalation since last week.

The AA reported on Tuesday that average petrol costs in the UK had crossed back above the 150p-a-litre mark for the first time since November.

Experts have warned that they probably have further to go, with a weaker pound versus the dollar this month adding to higher oil costs as the commodity is priced in the US currency.