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Sainsbury's profits increase 7.1%

Sainsbury's has hailed the success of its price-matching scheme as it delivered a better than expected rise in annual profits.

The UK's third largest supermarket, which has more than 1,000 stores, said underlying profits increased 7.1% to £712 million in the year to March 17, beating City forecasts for a 5% rise.

The group said overall sales excluding VAT rose 5.6% to £22.3 billion, taking its market share to the highest level for nearly a decade at 16.6%.

It was helped by its Brand Match price scheme, which guarantees to match Asda and Tesco on 14,000 branded goods.

However, the chain, which opened 73 Local convenience stores last year as part of 1.4 million sq ft of new space, said it will slow its rate of store expansion from just over 7% to about 5% in the current financial year.