UK supermarket Sainsbury's has today reported a third decline in first-half profit in a row.
The company said it was hurt by a fall in sales that partly reflected its own price cuts and said it would seek an additional £500m of cost savings.
The UK's second biggest supermarket in September completed a £1.4 billion takeover of Argos owner Home Retail.
It said today it was on target to achieve its £500m cost savings target by 2017-18 and set a new three-year target for savings of the same magnitude from 2018-19.
Sainsbury's said it made an underlying pretax profit of £277m for the 28 weeks to September 24, down 10.1% from the £308m made the same time last year.
First-half underlying sales fell 1%, with the second-quarter outcome, reported in September, down 1.1%.
Sainsbury's said the market remained competitive, with pricing pressure continuing to squeeze margins.
"The full impact of the devaluation of sterling on retail prices is as yet uncertain. However, we are well placed to navigate the external environment and remain focused on delivering our strategy," it said.
Sainsbury's said its full-year underlying profit expectation for the combined group remains in line with the market consensus (including Argos) of £573m.
It expects Sainsbury's second-half underlying profit, excluding Argos, to be lower than that achieved in the first half, as a result of continued price cuts and a step up in cost inflation.
Sainsbury's purchased Argos to accelerate its growth in non-food areas and vastly expand its online offering.
It plans to have 30 Argos outlets and 200 collection points in Sainsbury's supermarkets by Christmas and is targeting 250 Argos outlets in supermarkets over the next three years.
Sainsbury's said it was confident the acquisition would deliver the targeted £160m of synergy savings over three years.
The firm, whose net debt reduced to £1.3 billion, maintained its interim dividend of 3.6 pence.