MAJOR Channel Islands retailer SandpiperCI – which runs Marks & Spencer, Iceland, Morrisons and Costa Coffee in Jersey – saw its underlying profits fall last year as inflation hit distribution and staff costs.
The company’s sales increased in the year ending January 2023 by 3.6% to £218.2m, following 5% growth the year before. This was driven by a particularly strong performance in its M&S stores and a full year of ownership of the Red restaurants group in Guernsey, it said.
‘Our three-year (pre-pandemic) food like-for-like sales grew by just under 12%, clearly showing we have grown market share, which reflects our continued focus on mitigating significant cost-price pressure, to offer our customers the best possible values we can in these times of unprecedented cost price inflation,’ said executive chair Tony O’Neill.
He added: ‘Internally, we made our biggest-ever investment in pay to ensure we attract and retain the best talent available in a shrinking labour pool.
‘We also faced double-digit increases in our distribution costs, which form such a substantial part of our cost base. In spite of our efforts to mitigate these impacts, our trading EBITDA [Earnings Before Interest, Taxes, Depreciation and Amortisation] at £11.7m, fell by £1m year on year, a decrease of 8.2%.’
Earnings Before Interest, Taxes, Depreciation and Amortisation is a metric used to evaluate a company’s operating performance.
Operating profit was £7.1m compared to £8m the year before.
‘Inevitably, with inflation still in double digits, the outlook is uncertain,’ Mr O’Neill said. ‘On the positive side, current sales performance is exceeding our expectations and prices are starting to moderate. Our challenge remains continuing to grow our sales ahead of our cost base. As an island-based business with a finite market, ongoing inflation inevitably creates further cost pressures, particularly on labour and distribution.’