The new chief executive of Sainsbury's unveiled a shake-up of the company's management team yesterday after seeing profits for the past year slide 2.9 per cent.

Justin King, who joined the troubled supermarket chain two months ago from the food department of Marks & Spencer, made his first move as Sainsbury's said underlying profits for the year to March 27 fell to £675 million.

The UK's former number one supermarket chain has seen its figures wilt in the face of stiff price competition from rivals such as Asda and Tesco, while it has also been hit by the impact of its own restructuring campaign.

Among management changes today, Stuart Mitchell will step down as managing director of the main supermarket business - a move that will enable Mr King to take control of the day-to-day running of the operation.

During the last financial year, sales at Sainsbury's core UK business increased 2.2 per cent to £15.3 billion but the figure was down 0.2 per cent when viewed on a like-for-like basis. Operating profits were also 1.4 per cent lower at £564 million.

The company said the lacklustre performance reflected a three-year modernisation programme, including an overhaul of IT and distribution systems.

Mr King said the focus was now on the customer: "The past three years have seen enormous change but we must now build on the investments made and refocus our attention on delivering a better offer for our customers.

"We know that the disruption of change has meant we have not served shoppers as well as we would wish and are committed to ensuring they see the benefits of our investments in the coming months."

Thursday May 20, 2004