Sainsbury's warning as profits fall

Supermarkets group Sainsbury's today reported a fall in profits and warned that it faces a tough year ahead as it continues to lose sales to Tesco and Asda.

The group's new chief executive, Justin King, said he had spent seven weeks touring stores and depots and was now ready to implement his recovery strategy, which is likely to include further price cuts. He has implemented a boardroom shake-up.

Profits for the 12 months to 27 March fell by 2.9 per cent to £675 million.