By Daniel Hunter

Sainsbury’s has reported a 16.3% rise in its annual profits.

The UK supermarket giant said its profits were £898m for the year, compared with £772m the previous year.

Despite the large rise in profits, like-for-like sales – excluding new stores and fuel – grew by just 0.2%.

The figures come in what Sainsbury’s described as a “tough retail environment”.

The ‘big four’ supermarkets’ market shares – Tesco, Sainsbury’s, Asda and Morrisons – have come under immense pressure from budget supermarkets like Aldi and Lidl.

But Sainsbury’s said it managed to maintain its market share in the year.

Sainsbury’s chief executive, Justin King, who is due to step down in July after 10 years in charge, said: “While the general economic outlook is showing some signs of improvement, conditions in the food retail sector are likely to remain challenging for the foreseeable future as customers continue to spend cautiously.”

Mr King is credited with transforming Sainsbury’s fortunes during his 10 years. The supermarket’s chairman, David Tyler, pointed out that transactions grew by 10 million a week to around 24 million, under Mr King’s leadership.

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