Preliminary Results 2000/2001

Sainsbury(J) PLC
30 May 2001

J Sainsbury plc

J Sainsbury plc, the food retailer, today announces preliminary results for
the full year to 31 March 2001.

Results

* Group sales** up 5.9% to £18.4 billion (2000 - £17.4 billion).
* Underlying Group profit* before tax £549 million (2000 - £580 million).
* Second half underlying Group profit* before tax and e-commerce up 16.0%. 
* Shaw's full-year profits up 45.6%.
* Total dividend unchanged at 14.32 pence per share.
* Stronger fourth quarter sales continue into the new year.

Major short-term objectives met
        
* Stabilised underlying Group profit* before tax and e-commerce at £602
  million (2000 - £607 million).
* Stopped year-on-year decline in profitability in Sainsbury's Supermarkets - 
  second half profits up 21.0%.
* Sustained improvement in customer numbers, up 6.0% in the second half.
       
Action taken to refocus and strengthen the Group

* Sale of Homebase for total consideration net of costs of £975 million.
* Sale of Egyptian business substantially completed in past week.
* Acquisition of 19 Grand Union Stores, building Shaw's in the US to 185 
  stores
        
UK Supermarkets - 3 year transformation programme on track

Delivering quality products
* Two major new innovative food ranges - launched 'Taste the Difference' in 
  November 2000 and 'Blue Parrot Cafe' in March 2001
* Major new quality clothing collection, designed by Jeff Banks and sold under
  the Jeff & Co. brand, launched in March 2001
* Introducing 2,750 new or improved own label products
       
Improving the shopping experience
* Significant progress in reinvigorating store portfolio - adding 778,000 sq 
  ft of new space with 27 new stores including 14 supermarkets, and 34
extensions   to existing stores; 16 stores refurbished in the year.
* Created 6000 new jobs.
* Accelerated programme for reinvigoration into 120-130 stores in 2001/02.

Modernising the infrastructure
* Replatforming our systems underway with IT outsourced to Accenture and  
  blueprint for transition to new systems now in place
* Major programme to modernise our distribution network centred on the 
  development of a network of new highly automated depots around the country
* On track to deliver £600 million of annualised savings by April 2004 - £90 
  million delivered during year.
* On track to deliver margins to match industry leaders.

(* before amortisation of goodwill and exceptional items)
(** including VAT in Sainsbury's Supermarkets and sales tax in Shaw's.)

Sir Peter Davis, Group Chief Executive, said:

'Our second half results show that the changes we have made this year in our
UK supermarkets business are beginning to take effect.  In the short-term our
food offer is demonstrably better and our stores levels of customer service
and product availability are improving.  There is a lot of work still to be
done but in the longer-term I am confident that we will have even better
ranges, availability and stores to meet our customers needs.

'Shaw's in the US has had a successful year and our acquisition of the Grand
Union stores strengthens our presence in the region.

'The sale of Homebase and of the Egyptian business have helped us to regain a
stronger sense of purpose and direction for the Group in the future, and gives
us a stronger balance sheet and greater financial flexibility to fund our
strategic investment programme.

'As we only announced our 3-year recovery plan in October we have only just
begun.  There is a great deal of work yet to do, with new depots to be built
and brought on stream, all our computer systems to be renewed and most of our
stores still to be refurbished.  Much of this will involve extra costs from
double running but I am very encouraged by the progress to date and the
determination of the team to deliver one of the UK's most extensive corporate
recovery programmes.  Meanwhile the early store refurbishments, the
improvements in product quality, and in store service are bringing customers
back.  It is encouraging to see the turnaround in customer numbers and the
increase in like-for-like sales since Christmas, which continue into the
current financial year.  This shows the strategy is beginning to work.'


GROUP FINANCIAL SUMMARY

The results reflect the very significant amount of change across the Group
during the year.  We launched a radical business transformation programme in
Sainsbury's Supermarkets in the UK, sold Homebase and, last week, Egypt.  We
also achieved the two key short-term financial objectives we set ourselves in
May last year 
- to stabilise underlying Group profit* before tax and e-commerce costs 
- to stop the decline in profitability in Sainsbury's Supermarkets.    

The second half improvement in Sainsbury's Supermarkets performance enabled
the Group to deliver a 16.0% increase in underlying profitability* before tax
and e-commerce in the second half.

Group turnover increased by 5.9% to £18.4 billion (2000 - £17.4 billion).

Underlying Group profit* before tax and e-commerce costs was £602 million, in
line with last year (2000 - £607 million) and achieving our objective of
stabilising underlying Group profits for the year.  After e-commerce costs of
£53 million (2000 - £27 million), underlying Group profit before tax was £549
million (2000 - £580 million).

Operating Profit** (£m)            2H 2001  % change    FY 2001   % change
Continuing Operations                            
  Sainsbury's Supermarkets            254      21.0        510       -5.2
  Shaw's                               60      50.0        115       45.6
  Sainsbury's Bank                      4     100.0         13      333.3
  JS Developments                      12         -         25       56.3
                                      330      25.0        663        4.2
Discontinued Operations                            
  Homebase                             17     -34.6         57       -9.5
  Egypt                               (25)   -127.3        (35)    -218.2
                                       (8)                  22       
Total Operations                      322      15.6        685       -0.4

Operating profits** from continuing operations were £663 million, an increase
of £27 million or 4.2% over the previous year.  Following a difficult first
half, second half profits recovered strongly at £330 million, representing a
year-on-year increase of 25.0%.  Shaw's reported excellent profit growth with
profits at £115 million, an increase of 45.6%.  Sainsbury's Bank and JS
Developments reported continuing strong profit performances.

Operating profits** from discontinued businesses fell by £30 million, to £22
million, with Homebase and Egypt both reporting weaker second half results.  

(*   before amortisation of goodwill and exceptional items)
(** before profit-sharing, amortisation of goodwill, exceptional items, and  
    e-commerce costs)

Net interest payable was £76million (2000 - £72 million). 

Exceptional operating costs. The major change programme now underway in
Sainsbury's Supermarkets is far reaching and covers all areas of the business.
This has resulted in exceptional operating costs of £68 million in the year,
broadly in line with the estimated £75 million previously announced.  We
anticipate further one-off exceptional costs associated with this programme of
between £35 million and £50 million per annum over the next 3 years.

Non-operating exceptionals. The total charges for the year were £20 million
(2000 - £52 million profit).  This reflects the Group's aim to refocus its
management and financial resources on delivering profit recovery in the UK
Supermarkets business, growing the international business, and maximising
value from our UK property portfolio.  The non-operating exceptionals, mostly
previously announced, comprise :
- profits of £27 million related to property transactions 
- profits of £64 million on the disposal of Homebase realised during the year 
- exceptional charges of £111 million resulting from the impairment write-down
  of our Egyptian business. 

Tax. The Group tax charge was £168 million (2000 - £162 million) and the
underlying effective tax rate before exceptional items was 31.8% (2000 -
32.0%).  

Basic earnings per share was 13.8 pence (2000 - 18.3 pence).  Underlying
earnings* per share was 19.2 pence (2000 - 20.5 pence)

Final dividend. The Board is pleased to propose an unchanged final dividend of
10.30 pence per share.  Together with the Interim Dividend of 4.02 pence per
share this brings the total dividend for the year to 14.32 pence per share
(2000 - 14.32 pence per share).  The final dividend will be paid on 27 July
2001 to those shareholders on the Register at the close of business on 8 June
2001.   

Group capital expenditure increased to £956 million (2000 - £803 million),
mainly reflecting the acceleration of our development programmes across the
Group and Shaw's purchase of 19 additional stores.  In the current financial
year we anticipate Group capital expenditure of £1.1 billion.

Net debt at the year-end was £859 million (2000 - £1,264 million) the
reduction mainly reflecting the cash generated from the disposal of Homebase. 
With gearing at 17% (2000 - 27%) the Group's balance sheet provides the
strength to fund our major strategic investment programmes.   

Employees. At the year-end Group headcount was 169,900.  Sainsbury's
Supermarkets year-end headcount was 141,900 (2000 - 138,500).


SAINSBURY'S SUPERMARKETS

Our targets for the year were achieved.  We have improved our product ranges
and our service levels and it is evident that our customers appreciate these
changes as we have reversed the decline in customer numbers and profitability.
We saw strong like-for-like sales growth during the fourth quarter, of 4.8%
excluding petrol.  We have been driving for efficiencies, improving processes,
and working together more effectively right across the business.  Looking
ahead, we are confident that we are on track to deliver our longer-term goal
of achieving operating margins comparable with the industry leaders by the end
of our 3-year programme.

Financial summary
Sales grew by 4.7% to £13,894 million (2000 - £13,267 million).  Like-for-like
sales growth was 2.3% (2000 - -0.2%) and 1.7% excluding petrol.  

Operating profit** for the full year was £510 million (2000 - £538 million). 
After a weak first half, in which operating profit fell 22.0% to £256 million
(2000 - £328 million) we saw a strong recovery during the second half, with
operating profit up 21.0% to £254 million (2000 - £210 million). 

The second half turnaround was due to a stronger trading performance, albeit
against a weak comparator period last year.  In the second half, the sales
performance improved, particularly in the fourth Quarter, and we started to
see benefits of the cost savings.  This resulted in an improvement in the
operating margin from 3.5% in the first half to 3.8% in the second half.

Market environment 
The retail food market was strong, particularly in the fourth quarter, but
remains highly competitive.  Inflation over the year was -0.3% excluding
petrol.   

Late last year the Competition Commission Report indicated high levels of
consumer satisfaction in the industry.  We have co-operated with the Director
General of Fair Trading in developing a regulated code of practice dealing
with supplier relationships, and have also developed our own voluntary code
with our suppliers.  We have led the way in developing partnerships with
farmers, producers and processors to tackle problems, share information and
develop opportunities.

During the Foot and Mouth outbreak we have maintained our strong support for
British agriculture by purchasing and promoting British products through our
stores.  Sainsbury's sells over £6 billion worth of British food annually and
by far the greater part of the meat we sell is British.  We have run
additional tailor-made promotions to help market British food supplies that
cannot currently be exported, are ensuring that all agricultural suppliers are
paid more quickly, and are investigating how we can help rebuild the UK
agricultural industry and rural communities. 

Business transformation
Last year we achieved our objective of halting the decline in customer
numbers.  Our mission is to be 'First for Food', offering outstanding quality,
delivering great service, at a competitive cost.  

Quality food is a priority for our customers and we grew our sales through a
renewed focus on this, with innovations to meet clearly defined customer
needs:

- we launched the 'Taste the Difference' range in November and it is now our  
  best selling brand, with sales of the current 410 lines running at around £5
  million per week.  A further 60 products will be launched by mid-summer.

- we launched the 'Blue Parrot Cafe' in March, a range of healthier foods for 
  children, who find them fun, innovative and tasty.  So far 150 products are 
  on the shelves, with a further 75 due to be launched shortly, and sales are 
  running well ahead of forecasts.  
 
The next stage of our programme is enhancing our complementary non-food offer.
 
- We recently launched the 'Jeff & Co.' range of clothes and accessories.  
  Designed exclusively for Sainsbury's by fashion designer Jeff Banks, this is
  a new range of high quality women and men's clothing at affordable prices;  
  it is already in 19 of our larger stores and being well received by our 
  customers.  

Service. During the year we made great strides in improving customer service. 
We have made a significant investment to reduce queue lengths and a major new
programme for Delivering Great Service is now being rolled out across the
Supermarket's business.  We strive to excel in the way we serve customers and
Delivering Great Service is about being proactive and continually exceeding
our customers' expectations.   

Competitive cost. We are confident that the £600 million per annum of cost
efficiencies previously announced will be delivered by the end of our 3-year
programme.  Progress so far is encouraging.  We are on track, with cost
savings of £90 million delivered, including buying efficiencies, better
purchasing, and productivity improvements in store and central departments. 
We anticipate further cost efficiencies of £150 million in 2001/02 financial
year.

These cost efficiencies will partly be reinvested in enhancing the customer
offer and building sales, and partly in improving our operating margins over
the next three years.  These efficiencies will be partially offset by an
increase in revenue investment associated with the acceleration of our
refurbishment programme.

Business centre.  In September we will consolidate our central functions from
11 buildings to form our new business centre, located in a new building in
Holborn.  This is designed to encourage and support the new ways of working
which we are adopting right across the company to drive forward our
transformation.

Modernising our IT systems.   In November we out-sourced all our IT services
to Accenture, along with 800 Sainsbury employees.  Transforming the
supermarkets business requires a step change in our IT capability which
Accenture can deliver quickly and effectively.  Sainsbury's legacy systems
will be replaced by 'best-in-class' IT solutions, and these will give us the
opportunity to gain competitive advantage.  The programme to renew our systems
is running to plan.  

Rebuilding the supply chain.  We embarked on a major programme to modernise
our supply chain, based on developing a network of new highly automated depots
round the country.  This programme is on track and the first fulfillment
factory, at Haydock, is fully operational.  We have acquired sites for other
new facilities and rationalised parts of the existing network.  We aim to
reduce annual distribution costs by over £80 million, in line with our major
competitors.

Reinvigorating our stores.  We announced a programme to reinvigorate our whole
estate by the end of 2003/04, to bring all our stores up to the standards of
the best.  During the year, 34 stores were extended, adding 413,000 sq ft of
selling space, and a further 16 stores were refurbished.  Our results and
customer research show that our efforts have been well appreciated by our
customers. 

To date, the results from recently extended and refurbished stores are
encouraging. The majority of our refurbished stores during the year achieved
sales uplifts between 5-15%.  During the year we trialled a number of
different levels and styles of refurbishment.  As a result we have refined the
model and this is being rolled out from the beginning of the new financial
year.  On average, the 34 stores extended achieved sales uplifts of 23% during
2000/01, on space extended by 40%.  This exceeds our expectations at this
stage, and we expect ultimate sales uplifts of 35% or more. 

We have developed an innovative approach to customer segmentation and are
developing new formats to serve the needs of the different local markets. 
Together with our recent sales results, these give us the confidence to
accelerate the reinvigorate programme to cover 120-130 stores during 2001/02,
of which 35 will be extensions. 

We have opened 14 new supermarkets and 13 new Locals during the year, adding
352,000 sq ft of new space and providing 6000 new jobs.  In 2001/02 year we
will open 11 new supermarkets and 14 new Locals, providing a further 6500 new
jobs.

e-commerce.  e-commerce costs were £44 million (2000 - £20 million).  After a
late start in the market, we have made rapid progress and our
Sainsbury's-to-You service has increased its national coverage to over 50% at
the year-end. 

We have now developed a hybrid picking model, based on two dedicated picking
centres and in-store picking in 33 stores.  We believe this fulfillment model
is more suited to the current phase of the growth of the online market, and
the store-picking operation has been rolled out successfully.  Our service is
well received by busy working families and those who are housebound.


SAINSBURY'S BANK

Our financial service products have proved to be of good value and have won
many awards during the year.  Turnover increased by 13.2% to £154 million
(2000 - £136 million).  Operating profit grew to £13 million (2000 - £3
million) including a one-off credit of £3 million relating to VAT.

Customer lending income increased by 32% and commission income rose by 17%. 
Our key competitive advantage is our in-store offer
- our products are visible and available to Sainsbury's Supermarket's 
  customers
- our promotional strategy fits well in store
- our low cost base enables us to offer competitive rates 

We anticipate continued strong growth through increased integration of our
banking services into stores. In-store manning is being tested and we are
increasing the links between Sainsbury's Bank products and the Reward Card.


PROPERTY & JS DEVELOPMENTS

We have restructured our Property Division to maximise the value of our £4.5
billion UK supermarket estate.  In June we completed the sale and leaseback of
10 properties for £226 million, realising profits of £51 million.  We are
developing our portfolio beyond the immediate needs of supermarket shoppers,
by evolving mixed use schemes, in joint-ventures with developers.  These
include our plans to build housing, hotel and recreational facilities in a
major re-development of our Nine Elms store in London.  Other plans include
participating in redevelopment of our holdings in the Stamford Street area.

JS Developments had another successful year, with profits up to £25 million
from £16 million last year.  Eight major projects were completed - a town
centre redevelopment in Cardiff, three multi-unit retail parks, and four
single-unit developments. 


INTERNATIONAL - SHAW'S (US)

Financial summary
Sales grew by 5.1% to $4,055 million (2000 - $3,857 million) and included the
full year impact of the acquisition of Star Market in 1999.  Like-for-like
sales growth was 1.6% (2000 - 3.1%), reflecting the impact of the store
re-modeling programme.  

Operating profit for the year increased by 32.6% to $171 million (2000 - $129
million).  In addition to the strong trading performance, cost synergies of
$21 million resulting from the integration of Star Market contributed to the
profit growth.  Shaw's net margin increased significantly to 4.2% (2000 -
3.3%). 

Business summary
Shaw's is the 12th largest food retailer in the US.  We are a strong regional
player, with 185 stores in six states and the second largest share of the New
England market.  

Shaw's market position as a 'food & drug combo' with an emphasis on fresh
foods, customer service, and strong promotions, successfully differentiates
our offer from the discount operators.  The Reward loyalty programme was
launched in October and we now have 3 million card-holders.  Through the year
we enhanced continually our customer offer - widening the choice of fresh
produce, increasing the number of pharmacies, and extending our health and
beauty range.

The integration of Star Market in 1999 has now delivered a total of $35
million of distribution and buying cost synergies.  Our customers also saw the
benefits of the acquisition - Star Market's Wild Harvest and La Carte offers
were introduced into selected Shaw's stores.  

We have completed a substantial stores investment programme - we opened 3 new
stores and we completed 3 expansions, 10 re-models and upgrades.  We made a
significant investment in the supply chain, rationalising our distribution
system around fast and slow-moving product lines.

In March we completed the purchase of 19 stores from Grand Union for a total
consideration of $42 million plus stock valuation of $8 million.  This
acquisition added estimated annual revenues of $150 million.  It consolidated
Shaw's position in the New England market and has increased our presence in
Vermont and Connecticut.  

We have stimulated the two-way flow of knowledge and ideas between Shaw's and
Sainsbury's, with fresh produce merchandising being a good example of this.   

Shaw's is strongly positioned to deliver further growth.  We will extend our
successful offer into the stores acquired from Grand Union.  Six new store
openings, 3 expansions and 49 existing store upgrades are planned for 2001/02.
Continuing integration of Star Market and the Grand Union stores will realise
further savings.


DISCONTINUED BUSINESSES

We have disposed of Homebase and sold our interests in Egypt.  This enables us
to focus our resources on food retailing and related activities in the UK and
US. 

Homebase
In December we announced the sale of Homebase, which has generated a total
consideration of £975 million.  In December, we sold 28 development sites to
Kingfisher plc for £219 million in cash.  In March, the existing DIY business
was sold to Schroder Ventures for a net total consideration of £497 million,
comprising £422 million in cash, and a £75 million vendor loan note.  44
properties independently valued at £259 million were retained by the Group. 
In March we sold 22 of these properties to British Land for £156 million, in
line with the original valuation.  The Group re-invested £23 million to retain
an 17.8% equity stake.

Profit realised in 2000/01 on the disposal was £64 million.  We expect to sell
the remaining 22 properties, which have significant development potential,
over the next two years.  At current valuations these will generate cash
proceeds of £103 million and realise a profit on disposal of £20 million.

During the second half the performance of Homebase deteriorated markedly,
mainly due to poor weather and higher development costs for the large store
format, and uncertainty during the sale process.  For the second-half period
to 3 March 2001, when the sale was completed, operating profits before
e-commerce were £17 million, compared to £26 million for the prior year full
second half.  Full year profits before e-commerce fell by 9.5% to £57 million.
 Homebase e-commerce costs were £9 million (2000 - £7 million).        

Egypt
Following a strategic review we concluded that we should withdraw from Egypt
and avoid substantial further investment of management and financial
resources. The results to 31 March 2001 include an impairment write-down of
£111 million, including £54 million of goodwill previously capitalised.  The
net assets have been written down to reflect their net realisable value. 
Subsequent to the year-end we reached an agreement to sell our 80.1%
shareholding to the owner of the remaining shares.  This agreement was
substantially completed on 24 May 2001. 

Operating losses in the second half increased to £25 million (2000 - £11
million), bringing the full year operating loss to £35 million (2000 - £11
million). 


SOCIAL RESPONSIBILITY

Although it has been a very active year addressing the fundamentals of UK
business, we have not lost sight of our corporate responsibilities.

Altogether this year we have invested £14.2 million directly in support of UK
communities.  As a company we donated £6.4 million to programmes such as
'Fruit for Schools', 'Equipment for Schools', 'Choir of the Year', and
'Pictures for Schools'.  In addition we have given £7.8 million worth of goods
in kind such as used computers, uniforms and unsold fresh food to Crisis Fair
Share.

We also have helped raise more than £9 million for charities through our
customers, and colleagues efforts for charities such as Comic Relief and
charity collections in store.


GROUP OUTLOOK
 
'While it is early days in our three year recovery programme I am pleased with
the progress we have achieved so far.   The stronger sales we experienced in
the fourth quarter have continued into the current year.   This, in tandem
with the implementation of our planned transformation programme, gives us
confidence in achieving our recovery.'
A trading statement for the First Quarter of 2001/02 will be delivered on the
day of the Group's Annual General Meeting on 25 July 2001.


Group profit and loss account
for the year ended 31 March 2001
                                      2001                   2000
                                Before                  Before
                                except- Except-         except- Except- 
                                ional   ional           ional   ional
                                items   items   Total   items   items   Total
                           Note    £m      £m      £m      £m      £m      £m

Turnover including VAT 
and sales tax*              2  18,441       -  18,441  17,414       -  17,414
VAT and sales tax              (1,197)      -  (1,197) (1,143)      -  (1,143)
                                                        
Continuing operations          15,954       -  15,954  15,030       -  15,030
Discontinued operations         1,290       -   1,290   1,241       -   1,241 
                                                        
Turnover excluding VAT and 
sales tax                      17,244       -  17,244  16,271       -  16,271 
Cost of sales                 (16,037)    (45)(16,082)(15,118)    (83)(15,201)

Gross profit                    1,207     (45)  1,162   1,153     (83)  1,070 
Administrative expenses          (571)    (34)   (605)   (492)    (29)   (521)
Profit sharing                     (8)      -      (8)    (10)      -     (10)
Amortisation of goodwill          (16)      -     (16)    (11)      -     (11)
Group administrative 
expenses                         (595)    (34)   (629)   (513)    (29)   (542)
                                                                              
      
Continuing operations             603     (78)    525     652     (63)    589
Discontinued operations             9      (1)      8     (12)    (49)    (61)
Operating profit            3     612     (79)    533     640    (112)    528 
                                                           
Share of operating loss 
in joint ventures                  (3)      -      (3)      1       -       1 
Profit on sale of 
properties                  4       -      70      70       -      52      52 
Disposal of Homebase 
operations                  5       -      21      21       -       -       -
Impairment of Egyptian 
business                    6       -    (111)   (111)      -       -       -
Disposal of operations 
- discontinued                      -     (90)    (90)      -       -       -

Profit on ordinary 
activities before interest        609     (99)    510     641     (60)    581 
Net interest payable        7     (76)      -     (76)    (72)      -     (72)
                                                                              
      
Underlying profit on 
ordinary activities 
before tax                        549     (99)    450     580     (60)    520 
Amortisation of goodwill          (16)      -     (16)    (11)      -     (11)
Profit on ordinary 
activities before tax             533     (99)    434     569     (60)    509 
                                                         
Taxation                         (181)     13    (168)   (189)     27    (162)
                                                                              
      
Profit on ordinary 
activities after tax              352     (86)    266     380     (33)    347 
Equity minority interest           (4)      -      (4)      2       -       2 
                                                                              
      
Profit for the year               348     (86)    262     382     (33)    349 
Dividends                   8                    (274)                   (274)
                                                                 
Retained (deficit)/profit                         (12)                     75 
                                                        
Basic earnings per share    9                    13.8p                   18.3p
Underlying earnings per 
share**                     9                    19.2p                   20.5p
Diluted earnings per share  9                    13.7p                   18.2p
Underlying diluted earnings 
per share**                 9                    19.0p                   20.5p
                                                        
*  Includes VAT at Sainsbury's Supermarkets and Homebase and sales tax at 
   Shaw's Supermarkets.
** Before amortisation of goodwill and exceptional items.


Group statement of total recognised gains and losses
for the year ended 31 March 2001

                                                        2001             2000 
                                                          £m               £m
Profit for the year                                      262              349 
Currency translation differences on foreign 
currency net investments                                  10                3 
Total recognised gains and losses relating to the year   272              352 
                     

There is no material difference between the above profit for the year and the
historical cost equivalent.



Reconciliation of movements in equity shareholders' funds  
for the year ended 31 March 2001

                                                    Group           Company
                                                 2001   2000      2001   2000 
                                                   £m     £m        £m     £m
Profit for the year                               262    349       174    262 
Dividends                                        (274)  (274)     (274)  (274)
                                                  (12)    75      (100)   (12)
Currency translation differences                   10      3        62      4 
Goodwill on disposals charged to profit for 
the year                                          149      -         -      - 
New share capital subscribed for less 
expenses of capital issues                         24     21        24     21 
Amounts deducted in respect of shares 
issued to the QUEST                                (2)    (1)       (2)    (1)
Net movement in equity shareholders' funds         169    98       (16)    12 
Opening equity shareholders' funds               4,742 4,644     4,435  4,423 
Closing equity shareholders' funds               4,911 4,742     4,419  4,435 
                                   

Balance sheets
at 31 March 2001 and 1 April 2000

                                                    Group           Company
                                                 2001   2000      2001   2000 
                                                   £m     £m        £m     £m 
Fixed assets                                          
Intangible assets                                 278    316         -      - 
Tangible assets                                 6,215  6,563       535    394 
Investments                                       164     98     5,370  6,131 
                                                6,657  6,977     5,905  6,525 
Current assets                                          
Stocks                                            763    986         -      - 
Debtors                                           546    320       380    120 
Sainsbury's Bank                                1,914  1,718         -      - 
Investments                                        12     18         -      - 
Cash at bank and in hand                          475    533       222    237 
                                                3,710  3,575       602    357 
Creditors: falling due within one year                                        
Sainsbury's Bank                               (1,796)(1,607)        -      - 
Other                                          (2,529)(3,113)     (762)(1,035)
                                               (4,325)(4,720)     (762)(1,035)
Net current liabilities                          (615)(1,145)     (160)  (678)
                                          
Total assets less current liabilities           6,042  5,832     5,745  5,847 
Creditors: falling due after more 
than one year                                  (1,000)  (993)   (1,266)(1,412)
Provisions for liabilities and charges            (78)   (48)      (60)     - 
Total net assets                                4,964   4,791    4,419  4,435 
                                          
Capital and reserves                                          
Called up share capital                           483     481      483    481 
Share premium account                           1,401   1,379    1,401  1,379 
Revaluation reserve                                39      39        -      - 
Profit and loss account                         2,988   2,843    2,535  2,575 
Equity shareholders' funds                      4,911   4,742    4,419  4,435 
Equity minority interest                           53      49        -      - 
Total capital employed                          4,964   4,791    4,419  4,435 


Group cash flow statement
for the year ended 31 March 2001

                                                        2001             2000
                                                Note      £m               £m 
   
Net cash inflow from operating activities         10     922              838 
Returns on investments and servicing of finance               
Interest received                                         55               46 
Interest paid                                           (130)            (109)
Interest element of finance lease rental payments        (20)             (17)
Net cash outflow from returns on investments 
and servicing of finance                                 (95)             (80)
Taxation                                                (168)            (218)
Capital expenditure and financial investment                            
Payments to acquire tangible fixed assets               (951)            (755)
Receipts from sale of tangible fixed assets              453              385 
Purchase of own shares                                   (18)             (68)
Payments for intangible fixed assets                      (9)              (6)
Net cash outflow from capital expenditure and 
financial investment                                    (525)            (444)
Acquisitions and disposals                            
Acquisition of and investment in subsidiary and 
joint ventures                                           (45)            (293)
Investment in Sainsbury's Bank by minority 
shareholder                                                4                4 
Proceeds from disposal of operations              11     636                - 
Proceeds from disposal/(investment in) 
other fixed asset investments                              5               (1)
Net cash inflow/(outflow) from acquisitions 
and disposals                                            600             (290)
Equity dividends paid                                   (274)            (294)
Net cash inflow/(outflow) before management of 
liquid resources and financing                           460             (488)
Financing                            
Issue of ordinary share capital                           24               16 
(Decrease)/increase in short-term borrowings            (497)              79 
(Decrease)/increase in long-term borrowings              (36)             173 
Capital element of finance lease rental payments          (3)              (4)
Net cash (outflow)/inflow from financing                (512)             264 
Decrease in cash in the period                           (52)            (224)

Reconciliation of net cash flow to movement 
in net debt                            
Decrease in cash in the period                           (52)            (224)
Cash inflow/(outflow) from decrease/(increase)
in debt and lease financing                              536             (248)
Debt in subsidiaries acquired                              -              (76)
New finance leases                                       (28)              (7)
Currency translation difference                          (51)              (5)
Movement in net debt in the period                12     405             (560)
Net debt at the beginning of the period           12  (1,264)            (704)
Net debt at the end of the period                 12    (859)          (1,264)

Notes to the results

1. Accounting policies
   This financial statement has been prepared using the same accounting 
   policies as set out in the financial statements for the year ended 1 April 
   2000.

   The financial year represents the 52 weeks ended 31 March 2001 (prior year 
   the 52 weeks ended 1 April 2000).

2. Sales and underlying operating profit
   Sales and underlying operating profit (before profit sharing, amortisation 
   of goodwill, exceptional items and e-commerce costs) were as follows:

            Results from operations              Sales*         Operating 
                                                                  profit**
                                              2001              2001
                                                £m   %change      £m   %change
Continuing operations                                   
   Sainsbury's Supermarkets                 13,894       4.7     510     (5.2)
   Sainsbury's Bank                            154      13.2      13    333.3
   JS Developments                             149      (9.7)     25     56.3
   Shaw's Supermarkets                       2,743      14.6     115     45.6
                                            16,940       6.1     663      4.2
Discontinued operations                                   
   Homebase                                  1,421      (0.5)     57     (9.5)
   Sainsbury's Egypt                            80     233.3     (35)  (218.2)
                                             1,501       3.4      22    (57.7)
                                   
Total                                       18,441       5.9     685     (0.4)
                                   

*  Includes VAT at Sainsbury's Supermarkets and Homebase and sales tax at 
   Shaw's Supermarkets.
** Profit before profit sharing, amortisation of goodwill, exceptional items 
   and e-commerce costs.


The results above are before deducting e-commerce costs which were as follows:

                                                                2001       
                                                                  £m   %change
Sainsbury's Supermarkets                                          44    120.0
Homebase                                                           9     28.6
Total                                                             53     96.3
              

Sainsbury's Supermarkets includes £4 million of costs shown on the profit and
loss account within joint ventures.


3. Operating profit

                             2001                         2000       
                               Dis-                         Dis-
                    Continuing continued         Continuing continued 
                    operations operations  Total operations operations  Total
                          £m         £m       £m        £m         £m     £m
Turnover              15,954      1,290   17,244    15,030      1,241  16,271
Cost of sales        (14,862)    (1,175) (16,037)  (13,953)    (1,165)(15,118)
Exceptional cost of 
sales                    (45)         -      (45)      (38)       (45)    (83)
Gross profit           1,047        115    1,162     1,039         31   1,070 
Administrative 
expenses                (465)      (106)    (571)     (405)       (87)   (492)
Exceptional 
administrative expenses  (33)        (1)     (34)      (25)        (4)    (29)
Profit sharing            (8)         -       (8)       (9)        (1)    (10)
Amortisation of 
goodwill                 (16)         -      (16)      (11)         -     (11)
Group administrative 
expenses                (522)      (107)    (629)     (450)       (92)   (542)
Operating profit         525          8      533       589        (61)    528 
                                                 
 
The exceptional costs comprise the following:
        
                                                        2001             2000
                                                          £m               £m
 Exceptional cost of sales                                        
 Sainsbury's Supermarkets                                 37               27
 Homebase                                                  -               45
 Shaw's Supermarkets                                       8               11
                                                          45               83
 Exceptional administrative expenses                                        
 Sainsbury's Supermarkets                                 31               12
 Homebase                                                  1                4
 Shaw's Supermarkets                                       2               13
                                                          34               29
                                         
 Total exceptional costs                                  79              112
                                         
 
The costs in Sainsbury's Supermarkets relate to the business transformation
programme which involves significant changes across the whole business and
includes infrastructure projects such as reinvigorating the entire store
portfolio, modernising the supply chain, replatforming all IT systems and
introducing new ways of working. By the end of the year, four unprofitable
stores had been closed with the closure of a further seven underway.
 
At Shaw's Supermarkets, the reorganisation costs relate to the integration of
19 stores acquired from Grand Union. One unprofitable store was closed.


4. Profit on sale of properties
                                                        2001             2000
                                                          £m               £m 
Sale and leaseback of UK supermarket freeholds            51               82
Disposal of Shaw's Supermarkets' shopping centres          -              (15)
Disposal of Homebase properties (Note 5)                  43                -
Other                                                    (24)             (15)
                                                          70               52
                            

Property profits of £51 million were realised from the sale and leaseback of
10 Sainsbury's Supermarkets to an unrelated company for proceeds of £226
million. The leases are for 23 years at market rental increasing by 1 per cent
per annum over the period of the lease. They have been treated as operating
leases.


5. Disposal of operations

On 21 December 2000, the Group agreed to sell the Homebase business for a
total consideration of £975 million (net of costs), which comprised:

                                                                Consideration
                                                               (net of costs)
                                                                           £m
Sale of Homebase Limited to Schroder Ventures       
     Cash                                                                 422
     Loan notes                                                            75
Sale of development sites to B&Q                                          219
Freehold properties retained                                              259
Total                                                                     975
       

The sale to Schroder Ventures was completed on 3 March 2001 with a final
consideration based on completion accounts which are in the process of being
agreed. The consideration included £422 million of cash and £75 million of
loan notes with a 10% coupon, repayable at the earlier of Schroder's disposal
of Homebase or 2013. 

The sale of the development sites to B&Q plc took place on 21 December 2000
and is subject to a refund mechanism in the event that any of the sites are
not completed in specified time limits.  

Agreement was reached on 31 March 2001 to sell £156 million of the freehold
properties retained (see Note 4). The remaining properties, worth £103 million
at independent valuation, have been retained for development and subsequent
disposal.

£23 million was reinvested in the Homebase business in exchange for a 17.8%
share, comprising £1 million of equity and a further £22 million of 10% loan
notes.

Profit of £64 million was recognised in the year, £21 million for the disposal
of the business and the development sites to B&Q (after charging goodwill
previously written off of £149 million) and £43 million as profit on disposal
of properties (see Note 4). A further £20 million is anticipated on the
disposal of the remaining properties, based on independent valuation.


6 Impairment of Egyptian business

The net assets of Egyptian Distribution Group SAE (EDGE) have been written
down to reflect the estimated net realisable value. This resulted in a write
off of £111 million, including £54 million of goodwill previously capitalised.


Subsequent to the year end, the Group's 80.1 per cent interest in the business
was sold to Mr A Nasharty, the Chairman of EDGE and owner of the remaining
shares, for an initial consideration of $20 million (£14 million), with the
Group settling the external overdraft and financing debts which amounted to
£97 million at 31 March 2001. The sale was substantially completed on 24 May
2001.  The trading result for the period from 1 April 2001 to 24 May 2001 and
the costs of disposal will be included in the results for the year to 30 March
2002.


7. Capitalised interest

                                                        2001             2000
                                                          £m               £m 
Capitalised interest included in net interest payable     24               14
                     

8. Dividends

                                                  2001    2000    2001   2000 
                                                 pence   pence      £m     £m
                                                   per     per
                                                 share   share              
Interim                                           4.02    4.02      77     77
Final proposed                                   10.30   10.30     197    197
                                                 14.32   14.32     274    274
                                   

9. Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares in
issue during the year, excluding those held by the Employee Share Ownership
Trusts which are treated as cancelled. For diluted earnings per share, the
weighted average number of ordinary shares in issue is adjusted to assume
conversion of all dilutive potential ordinary shares. 

                                                        2001             2000
                                                     million          million
Weighted average number of shares in issue           1,901.5          1,913.5
Weighted average number of dilutive share options        9.9              4.1 
 
Total number of shares for calculating diluted 
earnings per share                                   1,911.4          1,917.6


The alternative measure of earnings per share is provided because it reflects
the Group's underlying trading performance by excluding the effect of
amortisation of goodwill and exceptional items.

                                                    2001           2000
                                                        Per              Per
                                                      share            share
                                            Earnings amount  Earnings amount
                                                  £m  pence        £m  pence
Basic earnings per share                         262   13.8       349   18.3 

Amortisation of goodwill                          16    0.8        11    0.6 
Exceptional items net of tax:
 Operating costs                                  64    3.4        84    4.4 
 Profit on sale of properties, disposal
 of operations and impairment write
 down                                             22    1.2       (52)  (2.8)
Underlying earnings per share before 
amortisation of goodwill and exceptional 
items                                            364   19.2       392   20.5 
                                   
Diluted earnings per share                       262   13.7       349   18.2 
Underlying diluted earnings per share 
before amortisation of goodwill and 
exceptional items                                364   19.0       392   20.5 
                                   


10. Reconciliation of operating profit to net cash inflow from operating
    activities
                                                        2001             2000
                                                          £m               £m 
Operating profit                                         533              528 
Depreciation                                             409              410 
Amortisation of intangible assets                         17               12 
Loss/(profit) on sale of equipment, 
fixtures and vehicles                                      2               (4)
Increase in stocks                                       (36)             (86)
Increase in debtors                                     (147)             (47)
Increase in creditors and provisions                     151               39 
(Increase)/decrease in Sainsbury's Bank current assets  (196)              48 
Increase/(decrease) in Sainsbury's Bank creditors        189              (62)
                                                         922              838 
                     
11.  Sale of business

As described in Note 5 the sale of the Homebase business completed on 3 March
2001 for a total consideration of £975 million, net of costs, including the
retained freehold properties. Of the total consideration, £636 million was
received in cash prior to the year-end.

                                                                          £m
Net assets disposed of:       
  Fixed assets                                                           339
  Goodwill                                                                 8
  Stock                                                                  247
  Debtors                                                                 60
  Cash                                                                    37
  Creditors and provisions                                              (145)
                                                                         546
  Goodwill written back                                                  149
  Profit on disposal                                                      21
                                                                         716
Satisfied by              
  Cash                                                                   636
  Loan notes                                                              75
  Debtors (net of transaction costs)                                       5
                                                                         716
              

On 31 March 2001 retained freehold properties with a net book value of £113
million were sold for consideration of £156 million.  This consideration was a
debtor at year end.

The business sold during the year contributed £66 million to the Group's net
operating cash flows, paid £3 million in respect of net returns on investments
and servicing of finance, paid £3 million in respect of taxation, utilised £89
million for capital expenditure, invested £19 million in an associate and
received £12 million from sales of fixed assets.

                     
12. Analysis of net debt
                                                       Other
                                                        non-
                                At 2         Disposal   cash  Exchange  At 31
                               April   Cash   of sub-  move-     move-  March
                                2000   flow   sidiary  ments     ments   2001
                                  £m     £m        £m     £m        £m     £m 
           
Current asset investments         18     (6)        -      -         -     12
Cash at bank and in hand         533    (31)      (37)     -        10    475
                                 551    (37)      (37)     -        10    487
Due within one year                                                           
Bank overdrafts                 (162)    22         -      -         -   (140)
Borrowings                      (689)   497         -      -       (38)  (230)
Finance leases                    (3)     3         -      -        (4)    (4)
                                (854)   522         -      -       (42)  (374)
                                                                             
Due after one year                                                            
Borrowings                      (828)    36         -      -        (4)  (796)
Finance leases                  (133)     -         -    (28)      (15)  (176)
                                (961)    36         -    (28)      (19)  (972)
                              (1,264)   521       (37)   (28)      (51)  (859)
                                                                             

13. Financial statements

The financial information is derived from the full Group Financial Statements
for the year to 31 March 2001 and does not constitute full accounts within the
meaning of section 240 of the Companies Act 1985 (as amended).  The Group
Accounts on which the auditors have given an unqualified report which does not
contain a statement under section 237(2) or (3) of the Companies Act 1985,
will be delivered to the Registrar of Companies in due course, and posted to
shareholders next month.  Copies may be obtained through our website
www.j-sainsbury.co.uk or by calling Freephone 0800 387504

For enquires
Analysts  Roger Matthews/ David Boyd 020 7695 6215
Media     Jan Shawe / Pip Wood 020 7695 6127