THE new chief executive of Sainsbury's un-veiled a shake-up of the company's management team today after seeing profits for the last year slide 2.9 per cent.

Justin King, who joined the troubled supermarket chain two months ago from the food department of Marks & Spencer, made his first move as Sainsbury's said underlying profits for the year to March 27 fell to £675m.

The UK's former number one supermarket chain has seen its figures wilt in the face of stiff price competition from rivals such as Asda and Tesco, while it has also been hit by the impact of its own restructuring campaign.

Among management changes today, Stuart Mitchell will step down as managing director of the main supermarket business - a move that will enable Mr King to take control of the day-to-day running of the operation.

During the last financial year, sales at Sainsbury's core UK business increased 2.2 per cent to £15.3bn, but the figure was down 0.2 per cent on a like-for-like basis. Operating profits were also 1.4 per cent lower.

at £564 million.

The company said the lacklustre performance reflected a three-year modernisation pro-gramme, including an overhaul of IT and dis-tribution systems.

Mr King said the focus was now on the cus-tomer: "The past three years have seen enor-mous change but we must now build on the investments made and refocus our attention on delivering a better offer for our customers.

"We know that the disruption of change has meant we have not served customers as well as we would wish and are committed to ensuring that customers see the benefits of our investments in the com-ing months."

The group's focus on its UK supermarket business has been helped by the recent sale of its US operation Shaw's to retail giant Albertson's.

Shaw's, which is the second largest food retailer in New England with 202 stores, was sold for 2.47 billion US dollars (£1.4 billion) in April.

Despite like-for-like sales growth of 0.4%, Shaw's managed to grow annual underlying operating profits by 8.8% to 234 million US dollars (£132.4 million).

The sale of Shaw's has also allowed Mr King - who took over from Sir Peter Davis - to simplify the group's structure with just one operating board.

Sainsbury's said the disappointing figures also meant only one director - finance chief Roger Matthews - received a bonus, while shareholders saw the company's dividend payout for the year held at 11.36p a share.

At the bottom line, profits after exceptional items fell back to £610 million from £667 million a year earlier. Last year's figure included a £61 million profit on the disposal of Homebase.