The failed bid to merge with rival Asda cost Sainsbury’s £46m, the supermarket giant has said.
In April, a proposed merger between Sainsbury’s and Asda was blocked by the UK’s competition watchdog over fears it would raise prices for consumers.
Sainsbury’s said that like-for-like sales growth slowed in the fourth quarter, especially over the Christmas period.
It added it would accelerate investment in its store estate and technology.
Fourth-quarter sales fell 0.9%, having fallen 1.1% over Christmas.
In the year ending 9 March, profit before tax fell to £239m, from £409m the previous year.
Costs for the year included the failed Asda bid, restructuring costs of £81m and defined benefit pension expenses of £118m.
Sainsbury’s chief executive Mike Coupe was not his usual Tiggerish self when presenting this set of results.
He gave the impression of someone trying to make the best of a less-than-ideal outcome – which, of course, he was.
In his ideal world, he would have been talking about the final preparations for the merger with Asda, but that was blown out of the water by the Competition and Markets Authority last week.
Instead, he was left to describe a fairly mundane set of annual results in glowing terms.
They show a company that is fighting hard on all fronts – trying to compete against aggressive low-price rivals and a resurgent Tesco, while at the same time finding the money to improve its stores, reduce debt and maintain dividend payments to shareholders.
Once you include restructuring costs and a £46m hit on the failed deal with Asda, statutory profits were down one-third to £219m – a tiny number for a company that has annual sales of £32bn.
Sainsbury insiders had warned against expecting a big strategic relaunch, a Plan B after the Asda failure.
Shareholders will still be disappointed that there wasn’t one, and will no doubt be pressing hard on whether – or rather when – it will emerge.
Chief executive Mike Coupe told the BBC’s Today programme: “Well, we draw a line under the past… The authorities blocked the [Asda] deal, but we think our business is adapting to the changing world of retail, and we will will carry on investing in our business.”
Mr Coupe said Sainsbury’s would invest in 400 supermarkets over the next year and would continue to invest in online sales.
He added that he would be “sticking to the company” when questioned about whether he had been asked to step down after the failed merger.
On a media call, he said “I’m planning to stay,” adding that shareholders and the board had been supportive.
Retail analyst Steve Dresser said in a tweet that the second half of the year was “poor for Sainsbury’s really”, taking into consideration “Halloween, Christmas, Mother’s Day, Valentine’s Day, Comic Relief” and a “hot summer in first half too”.