Sainsbury's crowned a three-year turnaround plan today by ringing up bumper annual profits of £488 million.
The figure for underlying pre-tax profits, which was slightly ahead of City estimates, represents a rise of more than 28 per cent compared with the previous year. Sales for the year to March 22 were 5.8 per cent ahead at £19.3 billion.
The retailer said it had exceeded a series of targets set down under the "Making Sainsbury's Great Again" scheme, which was launched in 2005 by chief executive Justin King.
Around 117,000 staff will also share a £47 million payout this year - an average of £401 each - as part of the success.
Chairman Philip Hampton said: "This year has been particularly significant for Sainsbury's since it marked the completion of the Making Sainsbury's Great Again recovery plan announced in October 2004 and we moved from a period of recovery to growth."
Sainsbury's has put on an extra £2.7 billion of sales during its turnaround plan, compared with a target of £2.5 billion. Customer numbers per week have also grown from 14 million to 16.5 million, it said.
The retailer has also enjoyed 13 consecutive quarters of like-for-like sales growth, including the most recent quarterly hike of 4.1 per cent.
Comparative growth for the full year to March 22 was 3.9 per cent, seeing Sainsbury's outperform industry leader Tesco.
Solihull-raised Mr King, who joined from rival Marks & Spencer in March 2004, said turning around the business meant fixing many "fundamental" parts of the business.
He said: "The plan was based on delivering great quality food at fair prices. To achieve this on an ongoing basis we needed to fix many fundamental parts of our operation.
"Only by satisfying customers and improving sales could we return to sustainable growth in both sales and profitability and this has driven everything we have done over the past three-and-a-half years."
He is now in line for a multimillion-pound payout, potentially worth as much as £9 million as a result of his success.
Sainsbury's results suggest that food shops seemed to be bucking the spending slowdown despite record food inflation affecting staple goods such as bread, rice and milk.
Mr King pledged continued progress for the business this year despite acknowledging pressure on consumer spending.
He said: "Consumer budgets are clearly under pressure and we expect the market to remain intensely competitive. Sainsbury's is now a much better business, able to compete and grow in this challenging environment."
Mr King could collect up to £9 million in cash and shares this year following his success in turning around the retailer.
Under his leadership the supermarket chain has achieved 13 successive quarters of like-for-like sales growth and more than doubled profits. It has also notched up £2.7 billion of sales growth in the three-year period, compared with an original target of £2.5 billion. One City retail analyst hailed the growth as a "considerable achievement".
Under a long-term incentive plan, Mr King will be allocated 1.66 million shares for meeting the turnaround plan's targets, worth around £6.5 million at current prices. He will get half the award today, and the other half next year.
The overall allocation was dependent on meeting sales growth and earnings per share targets, both of which have been achieved.
The share bonus will be on top of his annual pay package for the past year, which is expected to come in at more than £2 million.
During the year to March 2007 the 46-year-old was paid £1.92 million, including an annual bonus of £960,000 and pension payments of £181,000. The figure for this year will not be confirmed until Sainsbury's annual report is published next month.
Solihull-raised Mr King - whose fellow board members include former BBC newsreader Anna Ford - joined Sainsbury's in March 2004 from Marks & Spencer, where he was head of the retail group's food department.
The father-of-two previously worked as a manager at Mars, Pepsi, GrandMet and Asda. While at catering giant GrandMet, he introduced an advertising campaign for Haagen-Dazs ice cream which memorably featured scantily clad models.
