Financial Analysis Of
Sainsbury’s Plc
2010/2011

(Sainsbury supermarket, Blake 2012)

10105011

18/10/2012

Contents of Document
Section

Page

Contents.......................................................................................................................2
Introduction..................................................................................................................3
Subject company and history........................................................................................3
Profitability...................................................................................................................4
For Sainsbury, this figure was 11% in the financial year of 2010 and 11.1% in the year of 2011 (Sainsbury, Annual Report 2011 section). Such a minor change doesn’t manifest a huge degree of progress. In the annual report for 2011 p4, the company does give an account for this and state that growth was lower than the previous year due to the cumulative effect of its accelerated investment in space growth which started June 2009.

The company also holds seventh place for volume market share in the clothing industry and now has clothing sales growing faster than food, 17% to be exact with year on-year growth (Sainsbury,
Annual Report 2011 section). Celebrity fashion icon, Gok Wan has been a huge support in inciting growth of the TU brand by launching a clothing range at Sainsbury in 2011 which has been the main source of sales boost. (gok wan, Sainsbury TU section).

In addition to the appreciation of sales, the cost of sales rose from £19,964m in 2010 to £21,102m in 2011. Prominent contributing factors towards the rise in costs are the variation in Fiscal policy
(Sainsbury’s, Directors report 2011 section) which increased the rate of VAT from 17.5% to 20% on the 4th day of January 2011 (HM Revenue and Customs, 2011) along with the increase of the company’s workforce due to its addition of 1.5 million square feet of space from 2011-2012 (The
Independent, news section).

As the profitability of the