Sainsbury's full-year profits fall despite rising sales

Media captionChief executive Justin King says 'customer trust' was a big part of their success

Sainsbury's has posted a fall in pre-tax profits despite rising sales, as conditions remain "challenging".

Profits fell 1.4% to £788m ($1.2bn; 931m euros) for the year to 16 March, while sales, including fuel, rose 4.5% to £23.3bn.

The supermarket also confirmed that it will pay Lloyds Banking Group £248m for the remaining 50% of Sainsbury's Bank it does not already own.

Chief executive Justin King said the company's performance was "good".

"With 33 consecutive quarters of like-for-like sales growth our market share is at its highest level for a decade and we are outperforming our major competitors", he said in a letter to shareholders.

"Our clear and proven long-term strategy continues to drive good sales and profit growth."

Later, Mr King told the BBC that consumers were still being "very, very careful with their money".

He said: "We're shopping a lot like our parents did... and saving a little money for special occasions."

'Part of the future'

Around half of the supermarket's sales growth came from the online arm and smaller convenience stores, he said, with general merchandise and clothing growing at more than twice the rate of food over the year.

Underlying profits, which ignore the impact of property sales, beat analysts' forecasts with a rise of 6.2% to £756m.

Scotching speculation that he was about to stand down after nine years at the helm, Mr King said: "I still see myself as part of the future."

Sainsbury's, whose shares have risen 24% in the last 12 months, is the country's third-largest supermarket after Tesco and Asda.

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