Sainsbury’s is targeting savings of half a billion pounds in the three years from 2018-19.
In the supermarket’s interim results it said it had already achieved savings of £355m between 2015-16 and 2017-18 and this figure was on track to reach £540m by the end of the financial year.
Sainsbury’s said procurement and “joint ranging and sourcing” with Argos, which it acquired in 2016, had contributed to savings.
In addition it is aiming for savings of £500m in the three years from 2018-19.
“We achieved £100 million of cost savings in the first half of 2017-18 across a number of areas, including logistics, energy efficiency, labour efficiencies and structures, procurement and marketing,” said the supermarket.
“We are ahead of our cost savings target and now expect to deliver £185 million of cost savings this year and a total of £540 million of cost savings by the end of 2017-18, exceeding our £500 million target. We also have well-developed plans in place to deliver at least £500 million of cost savings over the next three years starting in 2018-19 as we continue to simplify the business.”
The results said group sales in the first half of 2017-18 were £16.3bn, up 17% and primarily reflecting consolidation with Argos. Like-for-like sales were up 1.6% while underlying profit before tax was down 9% at £251m.
Mike Coupe, group chief executive, said: “We have exceeded our cost savings target as a group, saving £100 million this half, which gives us the flexibility to increase pay for our store colleagues and improve our customer offer while delivering returns to shareholders.”
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