November 9, 2017 / 7:41 AM / a year ago

UPDATE 1-Sainsbury's profit falls and sales growth slows in tough market

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LONDON, Nov 9 (Reuters) - British supermarket Sainsbury’s reported a 9 percent fall in first half profit on Thursday, a fourth straight decline, and a slowdown in quarterly sales growth as intense competition in the UK grocery market showed no sign of letting up.

Sainsbury’s did, however, say it still expected to achieve profits for the full 2017-18 year in line with the current market consensus.

The group, which acquired Argos in September 2016, said it made an underlying pretax profit of 251 million pounds ($329.7 million) in the 28 weeks to Sept. 23.

That was ahead of analysts’ average forecast of 241 million pounds but down from 277 million pounds made in the same period last year.

The outcome reflected Sainsbury’s efforts to keep prices low despite rising inflation, higher staff wages and inclusion of the seasonally loss-making Argos business in the results, partly offset by synergies and cost savings.

Sainsbury’s said retail like-for-like sales rose 0.6 percent, excluding fuel, in the second quarter - a slowdown from growth of 2.3 percent in the first quarter.

“While the market remains competitive, we are well placed to navigate the external environment and we remain focused on delivering our strategy,” said Chief Executive Mike Coupe. ($1 = 0.7612 pounds) (Reporting by James Davey; Editing by Costas Pitas and Susan Fenton)

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