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Sainsbury's profits to shrink for the first time in a decade

Sainsbury’s is expected to reveal its first drop in profits for a decade as it struggles to combat competition from discount supermarkets.

The firm is expected to unveil a 17% fall in underlying pre-tax profits, which excludes one-off items and property writedowns, to £659m.

It will be the first time the supermarket suffered a profits fall since 2005.

In November, chief executive Mike Coupe said the company would cut prices by £150m, which has lowered profit margins. He warned that like-for-like sales in supermarkets will fall for the “next few years”.

Morrisons, Britain’s fourth largest grocer, is also likely to report a 3.3% fall in sales in a trading update on Thursday.

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