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There Was Spying: FBI Used 'Honeypot' To Tag-Team Papadopoulos In London Russiagate Setup

There Was Spying: FBI Used ‘Honeypot’ To Tag-Team Papadopoulos In London Russiagate Setup

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A mysterious Turkish woman who “assisted” FBI spy Stefan Halper in a London operation targeting Trump campaign aide George Papadopoulos has been revealed as yet another FBI operative sent to spy on the Trump campaign during the 2016 US election, according to the New York Times .
The woman, who went by the name Azra Turk, repeatedly flirted with Papadopoulos during their encounters as well as in email exchanges according to an October, 2018 Daily Caller report, confirmed today by the Times. “Turk,” posed as Halper’s assistant according to the report.
While in London in 2016, Ms. Turk exchanged emails with Mr. Papadopoulos, saying meeting him had been the “ highlight of my trip ,” according to messages provided by Mr. Papadopoulos.
“ I am excited about what the future holds for us :), ” she wrote. – New York Times
And as the Times makes clear, “the FBI sent her to London as part of the counterintelligence inquiry opened that summer” to investigate the Trump campaign.
The conversation at a London bar in September 2016 took a strange turn when the woman sitting across from George Papadopoulos, a Trump campaign adviser, asked a direct question: Was the Trump campaign working with Russia?

Ms. Turk went to London to help oversee the politically sensitive operation, working alongside a longtime informant, the Cambridge professor Stefan A. Halper. The move was a sign that the bureau wanted in place a trained investigator for a layer of oversight , as well as someone who could gather information for or serve as a credible witness in any potential prosecution that emerged from the case. – New York Times In his House testimony, George Papadopoulos described undercover FBI informant Stefan Halper introducing him to undercover FBI informant ‘Azra Turk.’ pic.twitter.com/8jO4lK6Ldt — Byron York (@ByronYork) May 2, 2019
Halper – who was paid more than $1 million by the Pentagon while Obama was president – contacted Papadopoulos on September 2, 2016 according to The Caller – and would later fly him out to London under the guise of working on a policy paper on energy issues in Turkey, Cyprus and Israel – for which he was ultimately paid $3,000. Papadopoulos met Halper several times during his stay, “having dinner one night at the Travellers Club, and Old London gentleman’s club frequented by international diplomats.”
As the Times notes, the London operation “yielded no fruitful information,” while the FBI has called their activities in the months before the 2016 election as both “legal and carefully considered under extraordinary circumstances,” according to the report. I agree with everything in this superb article except “Azra Turk” clearly was not FBI. She was CIA and affiliated with Turkish intel. She could hardly speak English and was tasked to meet me about my work in the energy sector offshore Israel/Cyprus which Turkey was competing with https://t.co/wbyBnvb6io — George Papadopoulos (@GeorgePapa19) May 2, 2019 I will make the job easy for America’s reporters. The US/Turkish/Australian/UK intel agencies who targeted me knew I had NO RUSSIA contacts. They were after my work on the east med pipeline that they all wanted to stop. Unfortunately for them, the project was implemented in 2017. — George Papadopoulos (@GeorgePapa19) May 2, 2019 This does seem like spying tbh https://t.co/9T5oJGWaex https://t.co/9T5oJGWaex — Blake News (@blakehounshell) May 2, 2019
Mr. Papadopoulos was baffled. “ There is no way this is a Cambridge professor’s research assistant ,” he recalled thinking, according to his book. In recent weeks, he has said in tweets that he believes Ms. Turk may have been working for Turkish intelligence but provided no evidence.
The day after meeting Ms. Turk, Mr. Papadopoulos met briefly with Mr. Halper at a private London club, and Ms. Turk joined them. The two men agreed to meet again, arranging a drink at the Sofitel hotel in London’s posh West End.
During that conversation, Mr. Halper immediately asked about hacked emails and whether Russia was helping the campaign , according to Mr. Papadopoulos’s book. Angry over the accusatory questions, Mr. Papadopoulos ended the meeting . – New York Times
Also of interest, the British government was informed of the spy operation on their soil , according to the Times , however it is unclear whether they participated. “Former CIA analyst Larry Johnson accuses United Kingdom Intelligence of helping Obama Administration Spy on the 2016 Trump Presidential Campaign.” @OANN WOW! It is now just a question of time before the truth comes out, and when it does, it will be a beauty! — Donald J. Trump (@realDonaldTrump) April 24, 2019
As for the FBI, the agency’s actions are now under investigation by the Justice Department’s Inspector General, Michael Horowitz.
He could make the results public in May or June, Attorney General William P. Barr has said. Some of the findings are likely to be classified.
It is unclear whether Mr. Horowitz will find fault with the F.B.I.’s decision to have Ms. Turk, whose real name is not publicly known, meet with Mr. Papadopoulos. Mr. Horowitz has focused among other things on the activities of Mr. Halper, who accompanied Ms. Turk in one of her meetings with Mr. Papadopoulos and also met with him and other campaign aides separately. The bureau might also have seen Ms. Turk’s role as essential for protecting Mr. Halper’s identity as an informant if prosecutors ever needed court testimony about their activities. – New York Times
During Congressional testimony last month, Attorney General Barr told Congress “I think spying on a political campaign is a big deal,” adding “I think spying did occur. The question is whether it was adequately predicated. And I’m not suggesting that it wasn’t adequately predicated. But I need to explore that.”
Maybe he could explore the role of Joseph Mifsud – a Maltese professor and self-professed member of the Clinton Foundation, who reportedly seeded Papadopoulos with the rumor that Russia had “dirt” on Hillary Clinton.
It doesn’t take a rocket scientist to conclude that Mifsud seeded the information with Papadopoulos, who was pumped for that same information during a “drunken” encounter at a London Bar with Clinton-associate and Australian diplomat Alexander Downer – who told authorities about the “dirt” rumor, which launched the FBI/DOJ counterintelligence operation that included Halper and “Azra Turk” spying on Papadopoulos .
Mr. Barr again defended his use of the term “spying” at a Senate Judiciary Committee hearing on Wednesday, saying he wanted to know more about the F.B.I.’s investigative efforts during 2016 and explained that the early inquiry likely went beyond the use of an informant and a court-authorized wiretap of a former Trump campaign adviser, Carter Page, who had interacted with a Russian intelligence officer. – New York Times
“Many people seem to assume that the only intelligence collection that occurred was a single confidential informant,” and the warrant to surveil Carter Page, said Barr. “I would like to find out whether that is in fact true. It strikes me as a fairly anemic effort if that was the counterintelligence effort designed to stop the threat as it’s being represented .”
Nice hedge, Barr, but what happened appears to be anything but “fairly anemic.” Dear Democrats: The American people aren’t stupid, they know what spying is and no amount of gaslighting will change the fact that the Obama Administration spied on my father’s campaign. AG Barr crushed this clown. https://t.co/G1kI8hw73h — Donald Trump Jr. (@DonaldJTrumpJr) May 1, 2019 Tags

Tease, Edge, Deny, Release

May 1, 2019 ~ …
Now I’ve written about my wife, Priya, a few times before, and if you managed to find this story then you’ll be able to find the ones I wrote about her first threesome, her first gangbang, and a few more like that. But this tale is a different kind of thing. Instead of Priya taking on more than one dick it’s about the time she gave me a birthday surprise that ticked all the boxes of a particular kink I’d been nursing for a while.
It’s called “edging”. That’s when you keep a guy on the edge of orgasm for a long time, kind of tease and denial, building him up, letting him down, and repeating for as long as possible until the inevitable happens and he blows a huge load. For some reason I’d become a little obsessed with this, or at least with watching it in porn. I’d always been a fan of blow jobs, and this was a new spin on an old favorite. I mean deep throat, gagging, that whole male dominance thing, it felt a little played out, to be honest, at least for me. What’s more, my wife was rather of tired of it too.
Anyway, we’ll get to all that in a moment, but I just want to make things clear before we go to the next page that this is a story about oral sex, of the long-term tease and denial variety, but one that’s spiced up by having…
Well, I’ve already said too much, don’t you think, for a story about teasing?
Enough with the preamble, let’s get on with the story. ***
“What do you want for your birthday?”
It was Priya, my wife of just over a year.
“I don’t know,” I said, and it was true. We both worked in tech, and I had enough money to buy anything I wanted, and I really didn’t want much. We had a nice home, with a good kitchen, bathroom and bedroom, but we both worked so much, and loved our work, that beyond that we didn’t really need anything. We took vacations, when we could, we ate at nice places, but mostly we worked, and when we didn’t work we worked out, and when we weren’t doing that we hung out together, got high, read, and made love.
“Come on. You’ll be 30. I ought to get you something special.”
I thought about.
“OK, how about a blow job?”
“What?”
“You heard me.”
“I don’t understand. Don’t you get enough?”
The thing was, I did get “enough”, I guess. I mean, we had sex three or four times a week, and there was nearly always a little cock sucking somewhere in that, but most of the time, nearly all, it was just the preliminary to the main event.
What I wanted was for it to be the whole deal.
“Sure,” I said, “but, well…what I want, what I’d like is, is just a simple blow job, you know? And – please don’t take this wrong way, because I love you – but I just want to sit there, with you kneeling down between my legs and sucking my cock until I cum. That’s it.”
She pouted.
“No fucking?”
“Hey, relax. It’s my birthday, right? And you asked what I wanted. This is what I’d like, to be honest. And we can fuck later, fuck every other day of the year. But on this day, my birthday, I’d like to relax, not have to think anything else. That make sense?”
“Yeah, I guess so. But, well, I have to ask – you do still find me attractive, right?”
Jesus, what a question.
Priya was 27 and a real Indian beauty, with these big eyes, big tits, slim waist, round ass, long legs and the kind of flexibility, strength and overall toning that came with three yoga classes a week.
She was hot as fuck.
I smiled.
“Come here,” I said, and we kissed. ***
Anyway, that happened a couple of weeks or so before my birthday, and of course we made love a few times in the interim, and Priya sucked my dick longer than usual, and even got me to finish in her mouth one time, but it was still always a varied affair. I went down on her, she went down me, I put my cock inside her, we moved through some different positions, she came, then I came, the end. Good sex, but not what I wanted for my birthday.
So, the big day comes, and that year, by luck, it was a Sunday, so no work.
Well, no work in the office, just the usual admin at home, going through emails and plotting out the week ahead, but nothing that couldn’t be done on a tablet with some coffee.
So that’s how rolled that morning, and then, about 10am, when we were done for the day, Priya pulled out a little gift box, said “happy birthday”, and gave it to me.
I opened it, and inside was small cake, basically a muffin, with 30 written in icing on top.
“Aw,” I said, “it’s so cute, but, well, is it all for me?”
She laughed.
“Of course it is, silly. But don’t worry, it’s not just a small cake. It’s a special small cake.”
“Really? How so?”
“It’s a space cake.”
“Astronaut food? Cool, I had that NASA ice cream once, kind of weird, but interesting. Thanks.”
Priya smiled.
What was I missing, other my blow job?
“Come on,” she said, “I thought you knew everything about things like this.”
“Things like what?”
“Edibles, weed. This is a space cake. A marijuana cake. They say it’s very strong, and that’s why it’s so small.”
I was delighted, and my face must have shown it, because Priya laughed.
“I knew it, I knew you’d like it.”
She hugged me, and we kissed.
“Now,” she said, “I’ve got something else planned, a surprise, but first of all you have to eat that cake, then,” she checked the time, “then in an hour or so, no later, I want you to take a nice long shower, and be ready for me in the bedroom at 12:00, no earlier.”
“Why, what for?”
“Don’t worry dear, you’ll like it. I promise.”
FFM

J Sainsbury : Final Results | MarketScreener

1 May 2019
J Sainsbury plc
Preliminary Results for the 52 weeks to 9 March 2019
Full year profit ahead of consensus; accelerating investment in stores and digital
· Underlying profits up 7.8 per cent; net debt £222 million lower, ahead of target; dividend up 7.8 per cent
· Accelerating investment in store estate and technology while reducing net debt and maintaining our dividend policy
· Investing to improve more than 400 supermarkets this year
· New target to reduce net debt by at least £600 million over the next three years
Strategic highlights
· Customers continue to rate Sainsbury’s first for food quality and we outperformed the market in premium categories 1
· Growth across all Sainsbury’s channels. Convenience and Groceries Online sales grew 3.7 per cent and 6.9 per cent respectively, with Convenience outperforming the market 2 . Supermarket sales grew one per cent, benefiting from the addition of Argos stores inside supermarkets
· Completed a major reorganisation of Sainsbury’s store operations, introducing a more efficient structure and more flexible colleague contract, with industry-leading pay of £9.20 per hour
· Argos grew sales, outperforming 3 a highly competitive and very promotional market
· Completed the integration of Argos, delivering £160 million in synergies. 281 Argos stores in Sainsbury’s supermarkets at the year end and increased the number of Argos collections points in Sainsbury’s convenience stores to 207 and total physical Argos points of presence to 1,200
· £4.7 billion of our sales start online and we are accelerating our investment in technology:
o Rolled out SmartShop self-scan to over 100 supermarkets
o Pay@Browse available in 162 Argos stores enabling customers to pay without queuing
o Trialling digital Nectar in Wales ahead of a broader roll-out later in the year
o Trialling the UK’s first checkout-free Grocery store
Financial highlights
· Underlying profit before tax of £635 million, up 7.8 per cent, driven by solid food performance, delivery of £160 million Argos synergies nine months ahead of schedule and reduced interest costs
· Retail underlying operating profit up 10.7 per cent to £692 million
· Sainsbury’s Bank underlying profits of £31 million, in line with guidance
· Statutory profit after tax of £219 million, down from £309 million, due to non-underlying charges relating to legislation on Guaranteed Minimum Pensions; retail restructuring; Sainsbury’s Bank transition; Asda transaction and Argos integration
· Strong cash generation with retail free cash flow of £461 million, up 6.7 per cent in the year
· Net debt reduced by £222 million to £1,636 million (including perpetual securities). Net debt reduction of £162 million before fair value movements on derivatives, ahead of £100 million guidance
· £220 million cost savings delivered in the year
· Underlying net finance costs reduced by 19.3 per cent to £96 million
· Underlying earnings per share increased 7.8 per cent to 22.0 pence per share
· In line with our policy of paying a dividend that is covered 2.0 times by underlying earnings, we propose to pay a final dividend of 7.9 pence per share, bringing our full year dividend to 11.0 pence per share, an increase of 7.8 per cent
Capital Markets Day
· We are planning a Capital Markets Day on 25 th September 2019 to further update on our progress
1. Nielsen Panel, Total FMCG, Market Universe, Total Outlets, 52 weeks data to P13 18/19
2. Nielsen EPOS Convenience Total Business, Quarterly data to Q4 18/19
3. British Retail Consortium, market data 52 weeks ended 9th March 2019
2018/19
2017/18
Variance
Business Performance
Group sales (inc VAT)
£32,412m
£31,735m
2.1%
Group like-for-like sales (inc VAT, ex fuel)
(0.2)%
Underlying profit before tax
£635m
£589m
7.8%
Underlying basic earnings per share
22.0p
20.4p
7.8%
Proposed final dividend
7.9p
7.1p
11.3%
Proposed full year dividend
11.0p
10.2p
7.8%
Net debt (including perpetual securities)
£1,636m
£1,858m
£222m
Return on capital employed
8.5%
8.4%

2018/19
2017/18
Statutory Reporting
Group revenue (ex VAT, inc fuel)
£29,007m
£28,456m
Items excluded from underlying results
£(396)m
£(180)m
Profit after tax
£219m
£309m
Basic earnings per share
9.1p
13.3p
Mike Coupe, Group Chief Executive of J Sainsbury plc, said : ‘I am pleased to report that we have increased profits, reduced net debt and increased the dividend. This is testament to the hard work of colleagues across the business and I would like to thank them for their commitment during this year of change.
‘We completed the integration of Argos that we set out in 2016, delivering £160 million in synergies ahead of schedule . We completed a major transformation of how we run Sainsbury’s stores and have made significant improvements to store standards in recent months, which remain a focus. Customers continue to rate us top for quality food and we are growing our premium ranges. We are also focused on reducing costs so that we can invest to make commodity products better value for our customers.
‘We will increase and accelerate investment in the core business, investing to improve over 400 supermarkets this year. £4.7 billion of our revenue now comes from our online businesses and we are increasing investment in technology to make shopping across Sainsbury’s, Argos and Sainsbury’s Bank as quick and convenient as possible. We will also continue to strengthen our balance sheet and are making a new commitment to reduce net debt by at least £600 million over the next three years.
‘I am confident in our strategy and also clear on what we need to do to continue to evolve the business in a highly competitive market where shopping habits continue to change.’
Dividend
In line with our policy of paying a dividend that is covered 2.0 times by underlying earnings, we propose to pay a final dividend of 7.9 pence per share, bringing our full year dividend to 11.0 pence per share, an increase of 7.8 per cent.
Outlook
Retail markets are highly competitive and very promotional and the consumer outlook continues to be uncertain. However, we are well placed to navigate the external environment and remain focused on delivering our strategy.
Fourth Quarter Trading Statement data for the 9 weeks to 9 March 2019
Like-for-like sales growth
2017/18
2018/19
Q3
Q4
Q1
Q2
H1
Q3
Q4
H2
FY
Like-for-like sales (excl. fuel)
1.1%
0.9%
0.2%
1.0%
0.6%
(1.1)%
(0.9)%
(1.0)%
(0.2)%
Like-for-like sales (inc. fuel)
1.2%
1.8%
2.6%
3.4%
3.0%
0.3%
(0.5)%
0.0%
1.5%
Total sales growth
2017/18
2018/19
Q3
Q4
Q1
Q2
H1
Q3
Q4
H2
FY
Grocery (exc. Pharmacy)
2.3%
2.1%
0.5%
2.0%
1.2%
0.4%
(0.6)%
0.0%
0.6%
General Merchandise
(1.4)%
(1.2)%
1.7%
1.2%
1.5%
(2.3)%
1.5%
(1.3)%
0.0%
Clothing
1.0%
0.4%
0.8%
(3.4)%
(1.0)%
(0.2)%
(1.6)%
(0.6)%
(0.8)%
Total Retail (excl. fuel)
1.2%
1.3%
0.8%
1.7%
1.2%
(0.4)%
(0.2)%
(0.4)%
0.4%
Total Retail (inc. fuel)
1.4%
2.3%
3.2%
3.9%
3.5%
0.8%
0.0%
0.6%
2.1%
Notes
A. All sales figures contained in this trading statement are stated including VAT from 2018/19and in accordance with IFRS 15.
Our strategy
We are delivering the strategy we set out in November 2014. The market is competitive and the way customers shop continues to evolve in the ways we anticipated.
Our strategy is based on five pillars: knowing our customers better than anyone else; great products and services at fair prices; being there for our customers whenever and wherever; colleagues making the difference and our values making us different.
As shopping habits evolve, we continue to update our strategic priorities. This will help to develop and differentiate our customer offer and to grow and create value for our shareholders. Our five updated priorities are:
1. Differentiate food and grocery through quality, value and service
2. Grow General Merchandise and Clothing
3. Offer our customers easy access to financial services
4. Generate efficiencies to invest in our digital future
5. Strengthen the balance sheet
Our values
Our values are integral to how we do business and enable us to drive lasting positive change in communities across the UK and overseas. We have five values:
· Living healthier lives: 78 per cent of our own-brand products are labelled with green and amber traffic lights, just one of the ways we are helping our customers to eat and live well
· Sourcing with integrity: Winner of the Marine Stewardship Council’s UK Supermarket of the Year for the fifth year in a row
· Respect for our environment: 100 million+ items with reduced or zero plastic packaging through design changes this year, with further reductions in the pipeline
· Making a positive difference to our community: A record 94 per cent of our stores partnered with local charities this year
· Great place to work: As part of our efforts to be the most inclusive retailer, 31.4 per cent of senior roles are now held by women, making progress towards achieving our target of 40 per cent
Notes
Certain statements made in this announcement are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward-looking statements. They appear in a number of places throughout this announcement and include statements regarding our intentions, beliefs or current expectations and those of our officers, directors and employees concerning, amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the business we operate. Unless otherwise required by applicable law, regulation or accounting standard, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
A results presentation for analysts and investors will be held on 1 May 2019 at 9.30am.
To view the slides of the results presentation and the webcast: We recommend that you register for this event in advance. To do so, visit www.about.sainsburys.co.uk and follow the on-screen instructions. To participate in the live event, please go to the website from 09:00 on the day of the announcement, where there will be further instructions. An archive of the webcast will be available later in the day.
To listen to the results presentation: To listen to the live results presentation by telephone, please dial 0800 783 0906 (or +44 (0)1296 480 100 if you are unable to use the primary number). The pass code for the event is 753 931. A transcript of the presentation and an archive recording of this event will be available later in the day at www.about.sainsburys.co.uk . Sainsbury’s will issue its 2019/20 First Quarter Trading Statement at 07:00 (BST) on 3 July 2019.
Enquiries
Investor Relations
Media
James Collins
Rebecca Reilly
+44 ( 0) 7801 813 074
+44 (0) 20 7695 7295
MARKET CONTEXT
The Market
Economic conditions eased slightly for UK consumers over the last 12 months, as average weekly earnings grew ahead of a reducing inflation burden for most of the year. Despite this, consumer confidence was impacted by the continuing uncertainty around Brexit.
Lower levels of inflation and declining consumer confidence have resulted in reduced sales growth in both the food and non-food sectors. Non-food retailers were particularly impacted by weak demand, rising costs and the ongoing impact of increasing online penetration, driving further consolidation and restructuring of the sector.
Retail trends
The past year has seen continued rapid change in how customers shop in the UK. With greater access to a variety of shopping channels, the UK consumer has more flexibility and choice than ever in how and when they shop for food, general merchandise and clothing. Barriers to entry in some of these channels are far lower than before, giving disruptors the opportunity to gain strong footholds across the retail landscape. The impact of this can be seen in the record levels of store closures, traditional retail business collapses and redundancy for retail colleagues. Restructuring of the UK retail industry is likely to continue for some time given rising cost pressures in wages, rates and other fixed costs.
Consumers are shopping for groceries more frequently across different channels and store formats, with online and convenience channels showing strong growth. There is limited new space being added to the market from traditional grocers but discount and bargain retailers continue to open significant numbers of new stores and gain market share. Consumers are also eating more meals outside the home and the growth of food delivery services such as Deliveroo, Just Eat and Uber Eats is also impacting grocery spending. High streets and retail parks continue to experience footfall and sales declines as online participation grows. A key driver of the trend towards general merchandise and clothing being bought online is the wide choice of delivery and pick-up options. Delivery services have improved in terms of speed and reliability, while Click & Collect is both cost-effective and convenient for customers and accounts for a significant proportion of online general merchandise and clothing sales.
Retailers that can fulfil their customers’ needs flexibly, rapidly and conveniently, offering a consistent experience to consumers across all channels, will be set up to succeed in this increasingly tough and competitive retail environment.
Sainsbury’s response to a competitive and evolving market
Our strategy is to respond to the changing needs of our customers and enable them to shop with us whenever and wherever they want.
The quality of our food continues to be a strong differentiator and we are working in partnership with our suppliers to bring exclusive, innovative and distinctive products to our customers. We are adapting our supermarket space to serve a wide variety of shopping missions, ensuring we offer customers a broad range of products and services under one roof. This includes Argos stores as well as popular brands such as Specsavers, Sushi Gourmet and Explore Learning. Maximising the productivity of our supermarket space in this way is driving an increase in trading intensity across our supermarket estate. We have also transformed the way we run Sainsbury’s stores, fundamentally changing how our managers and colleagues work, aligning better with the ways customers shop.
In the fast-growing Groceries Online channel, technological improvements have improved productivity and helped to drive sales, making this channel to market more profitable. Our convenience store estate consists of over 800 stores and is outperforming the market in value and volume as we continue to tailor the ranges we offer to ensure they reflect the local demographics and different shopping missions in each store.
Our General Merchandise and Clothing business is performing well in a highly competitive market and we had 281 Argos stores in our supermarkets at the year end. Argos’s unique hub and spoke distribution network enables quick, convenient and efficient fulfilment of customer orders for collection or home delivery. Our Fast Track collection and delivery channels have grown significantly as the combination of a strong online proposition and a wide availability of delivery and pick-up options continues to be popular with customers.
We have accelerated the rate of change across the Group, with a focus on technology-led innovation that makes shopping faster, easier and more convenient for our customers. SmartShop self-scan, which enables customers to scan their shopping directly on to their phone or hand-held device, is available in over 100 supermarkets. We were the first grocer in the UK to introduce SmartShop mobile pay in eight convenience stores, enabling customers to bypass the checkout and pay on their smartphone from anywhere in the store. Pay@Browse is currently available in 162 Argos stores, offering customers a convenient payment option without the need to queue at a till. We have also introduced a visual search function which allows customers to search the Argos product range using a photo of the product they want.
We have delivered £160 million EBITDA of synergies from the acquisition of Argos. Together with ongoing cost savings progress and a focus on maintaining balance sheet strength, we are confident that we have the resources to remain competitive in our rapidly changing markets.
OUR STRATEGY
Priority 1: Differentiate food and grocery through quality, value and service
Great quality food has been at the heart of our business since John James and Mary Ann Sainsbury opened the doors of our first shop in Drury Lane in 1869. 150 years later, we continue to invest in quality, value and choice, differentiating our offer in a highly competitive market.
Grocery sales increased by 0.6 per cent, predominantly in the first half of the year. Sales in Convenience and Groceries Online grew 3.7 per cent and 6.9 per cent respectively and Convenience outperformed the market 4 .
Grocery shopping habits continue to change rapidly as customers seek higher quality at lower prices. Quality is a key differentiator for us. Customers consistently rate the quality of our food as market-leading 5 and continue to switch to us from more premium competitors 6 . We outperform the market in our top tier categories 7 such as Taste the Difference , which grew faster than the market, with volume growth of 2.2 per cent.
Our strength and growth in premium, value-added ranges help us to invest in making our commodity ranges better value. But in this highly competitive area, we know we have more work to do to grow sales. We continue to review our ranges to ensure we offer our customers the right combination of value and choice. Our cheese category is a good example of this. By reducing costs in our supply chain, we were able to lower prices at the value end of the category, making us more competitive on price and driving volume growth. Together with an improvement in quality and greater choice at the premium end, we improved our market share position 8 and drove growth in cheese volumes of six per cent compared to the period before we implemented the changes.
In fresh produce, we have worked closely with suppliers to develop our Ripe & Ready ranges. As a result, we have grown volumes by 72 per cent over the last five years, with prices on average 13 per cent lower than the market leader in this category.
We are well positioned in a number of high growth food categories where we can add value for our customers. For example, we have a strong share in the fast-growing vegetarian and vegan markets and we have invested in new ranges of plant-based meals for customers who want more alternatives to meat. Our free-from ranges contribute over £100 million in sales and we outperform the growing allergen-free market 9 . We also increased volumes in our dairy alternatives category by 8.7 per cent and outperformed the market by offering a wide choice of branded products.
Customers want distinctive products they can’t find anywhere else and the number of customers who said this was their primary reason for shopping with us increased. Our dedicated Future Brands team works closely with small, specialist suppliers to bring these innovative and exclusive ranges to our customers. We have a longstanding history of working in genuine partnership with our suppliers and, over the last seven years, they have consistently ranked us first or second for supplier relationships in the industry’s largest independent supplier survey 10 . We now have 126 Future Brands in our stores. E very £1 of profit made from a Future Brand is more than 50p of profit that we would not have otherwise made.
Our strategy is to enable our customers to shop with us whenever and wherever they want. Our supermarkets are the right size, in high quality locations and we continue to invest in them. By regularly reviewing our ranges, introducing new and exclusive products and opening Argos stores in Sainsbury’s supermarkets, we have increased trading intensity in supermarkets. We have further invested in our store estate by refitting our General Merchandise and Tu clothing areas and bringing in the right ranges to serve local customer needs. We will increase investment in our supermarkets in 2019/20.
We work with selected concession partners such as Sushi Gourmet, Timpsons and Specsavers so that our customers can do more of their shopping under one roof. We trialled a major upgrade of our beauty range in eight stores, with new and exclusive products and larger, more inspiring store layouts. This has proved popular and elements of this will be rolled out further next year.
In food and grocery, online and convenience sales continue to grow faster than supermarket sales. Both of these channels continue to be strong drivers of profitable growth for us. Increasingly, ranges in our convenience stores are specifically tailored to local customer demographics, generating market-leading trading intensities.
We are investing in our Groceries Online offer so that we can continue to improve the ease, speed and reliability of the service for customers. Our Groceries Online app now accounts for over 20 per cent of orders. We offer same day delivery to 57 per cent of UK households, up from 40 per cent in 2017/18. Customers can also collect online orders from 124 supermarkets. Our Chop Chop one-hour delivery service now operates in London zones one and two, covering over 1.7 million customers.
We are also investing in technology in supermarkets to make shopping easier and more convenient. SmartShop, which allows customers to scan their shopping using a hand-held device or their mobile phone, is now available in over 100 supermarkets, helping customers save time and manage their budgets. We introduced SmartShop Mobile Pay in eight convenience stores, enabling customers to scan their shopping and pay on their smartphone from anywhere in the store – a first for the UK grocery market. Customers who use SmartShop are more likely to buy more and to be more loyal to Sainsbury’s.
During the year we completed the largest reorganisation in our stores for more than a decade. We made two major changes to the way Sainsbury’s stores operate, to ensure we are fit for the future and able to adapt to evolving shopping habits. Firstly, we created a more efficient and effective management structure which is designed to ensure that our managers are genuinely managing our stores and our colleagues and that our customer-facing colleagues have more time to spend with customers on the shop floor. We also introduced one fair and consistent colleague contract, which includes greater flexibility, so that we can make sure our colleagues are always in the right place at the right time for our customers. In recognition of these changes, we made an industry-leading investment in colleague pay, taking the base rate to £9.20 per hour and bringing the total pay increase to 30 per cent over the last four years for Sainsbury’s store colleagues.
We have made significant improvements to store standards in recent months, which remain a focus. Our new customer feedback service, Lettuce Know, provides detailed data to each of our stores individually, enabling them to respond to customer feedback in real time. We would like to thank our store colleagues for all their commitment and hard work as we have worked through a year of significant change.
4. Nielsen EPOS Convenience Total Business, Quarterly data to Q4 18/19
5. Sainsbury’s Brand Tracker
6. Nielsen Panel Market Universe: Total Outlet (52 wks data to P13 18/19)
7. Nielsen EPOS Data Market Universe: Grocer Multiples (52 weeks ending 9 th March 2019)
8. Nielsen Panel & EPOS Report, as at week 24
9. Nielsen Panel Market Universe : Total Outlet (52 wks data to P13 18/19)
10. Advantage Supplier Survey
Priority 2: Grow General Merchandise and Clothing
We are one of the largest general merchandise retailers in the UK, offering customers choice, value, convenience, flexibility and fast delivery. The majority of our General Merchandise sales are through Argos, which we continue to integrate with the Sainsbury’s General Merchandise business to drive scale and efficiency. We have delivered £160 million in Argos EBITDA synergies nine months ahead of our original schedule.
Overall, General Merchandise sales were flat in a declining market. Argos sales grew, outperforming a highly competitive and very promotional market by 2.2 per cent 11 . Margins remained under pressure, impacted by strong sales of lower margin consumer technology products.
Sainsbury’s General Merchandise sales, particularly electricals, declined as we continued to streamline our ranges in nearly 300 supermarkets in favour of Argos General Merchandise. We continued to rebalance Sainsbury’s ranges away from lower margin products such as electricals towards higher margin ranges such as clothing.
Argos saw sales growth in electricals, leisure and toys and, during the hot summer, in seasonal categories such as garden furniture, outdoor games and barbeques. We are investing in our home, garden and furniture categories with an emphasis on our own-brand ranges.
We have 281 Argos stores in Sainsbury’s supermarkets, achieving our 2018/19 year-end target of 280. These stores now account for around 20 per cent of Argos store sales. Sales in Argos stores in Sainsbury’s supermarkets that have been trading for more than three years are 43 per cent higher than in their first year and sales in stores trading for more than two years are 31 per cent higher than their first year of trading. We continue to see an uplift in grocery sales in supermarkets that have an Argos store. We opened our first Argos in a Sainsbury’s convenience store in Ascot, Berkshire, as we trial new ways to bring our broader Food and General Merchandise offer to more customers.
As the third most visited website in the UK, Argos is already a leading online retailer. Around 60 per cent of Argos sales start online, exceeding £3 billion in the year, and sales generated through mobile devices have now passed £2 billion. Over the last two years we have significantly improved the Argos online shopping experience, making our website easier to use and giving customers more information on product availability and more control over delivery times. We have improved the display of homewares and furniture online, making browsing easier and more inspiring. We also improved the online experience to make it quicker for customers to buy through Argos Financial Services, increasing penetration to 19 per cent of Argos store sales.
Argos has a market-leading delivery and collection proposition and we have invested in improving our ability to rapidly fulfil online orders. We can deliver to over 90 per cent of UK postcodes within four hours and offer immediate in-store collection. Sales through our unique Fast Track delivery service increased by 13 per cent and Fast Track Click & Collect by 10 per cent. We offer customers a number of convenient options for online delivery and collection. 85 per cent of customers who order online choose to collect from Argos’s 1,200 physical locations across the UK, including 594 standalone Argos stores, 281 Argos stores in Sainsbury’s supermarkets and 317 collection points in supermarkets and convenience stores. We opened our regional fulfilment centre in Croydon last year to improve our service to 3.4 million households across London and the South East. This enables us to deliver our full range the same day to over 50 per cent of the country. We had on average over 20,000 products stocked in our stores available for delivery within four hours through our Fast Track service. This service is available to over 90 per cent of UK postcodes.
We continue to invest in technology to make customers’ lives easier. Since we acquired the business in 2016, we have made significant progress in upgrading the Argos store estate to digital stores. We have 476 digital Argos stores, including 281 in Sainsbury’s supermarkets, compared to 104 digital stores at the end of 2016/17. We will have 650 by the end of 2019/20. We have introduced Pay@Browse to 162 Argos stores, which enables customers to pay digitally, without queuing at a till and we will roll this out to a further 200 stores in 2019/20.
We are pleased that Argos’s customer satisfaction levels, measured through our Net Promoter Scores, increased in the year. We are also delighted that, in an independent UK-wide survey, our ranking for customer service satisfaction jumped from 46 th place last year to eighth place this year 12 .
In recognition of the great service Argos colleagues give customers every day, we awarded a pay increase for the majority of Argos colleagues from £8 to £8.50 from April 2019, bringing the total increase to 18 per cent since we acquired Argos in September 2016.
The general merchandise market will remain highly competitive as online shopping offers customers greater choice and convenience. We continue to drive efficiency throughout the business so that we can give customers better value for money. We combined our Sainsbury’s and Argos General Merchandise commercial teams this year. By buying and managing our ranges together we are able to improve our offer to customers and reduce costs. For example, we brought together our homewares ranges under our own brand, Home, sold through both Sainsbury’s and Argos.
Offering high street quality at supermarket prices has made Tu the sixth largest clothing brand in the UK by volume. Tu clothing outperformed the market and while sales declined, our decision to remove a key promotional event during the year helped increase full price clothing sales by 12 per cent. We continued to develop our Tu online offer and online sales of Tu clothing grew by 55 per cent in the year. We have also launched Tu clothing on the Argos website for home delivery or collection from Argos stores and collection points in Sainsbury’s stores across the UK.
11. British Retail Consortium, market data 52 weeks ended 9th March 2019
12. Institute of Customer Service UK Customer Satisfaction Index ranking
Priority 3: Offer our customers easy access to financial services
We are focused on delivering great value financial services to more customers across the Sainsbury’s Group. Customer numbers increased by five per cent to two million at Sainsbury’s Bank and by six per cent at Argos Financial Services, to two million. Nectar is a key differentiator for Sainsbury’s Bank and around 74 per cent of our customers have a Nectar card and benefit from Nectar points across a range of products.
Financials Services underlying operating profits decreased to £31 million, as we previously guided. This is because of a combination of higher bad debt charges due to the adoption of IFRS 9, higher costs and a more cautious approach to unsecured lending. Our new strategy focuses on growing our mortgage book and commission products. Customer lending increased by £1.3 billion. Growth in mortgage balances accounted for the majority of the increase, alongside increases in Credit Card and Argos Financial Services card balances, while personal loan balances were slightly down year-on-year.
Income was three per cent lower, reflecting the incremental cost of Tier 2 capital of £8 million and an increase in the cost of savings as interest rates rose.
We continue to grow mortgages, focusing on high quality, low loan to value lending, and had lent £1.4 billion at the year end. Margins were under some pressure in the first half of the year, but this eased in the second half, in line with the market, and overall returns on mortgages continue to be strong. Mortgage balances now account for 21 per cent of customer lending, up from five per cent last year.
Argos Financial Services customer numbers grew, with 19 per cent of Argos store sales made on Argos Cards and balances up 11 per cent.
Our Commissions business has grown significantly this year, with combined Home, Car, Pet and Life Insurance new business volumes up 25 per cent, while Travel Money income increased 14 per cent. ATM income decreased due to a fall in transactions.
We are focused on improving our digital offer to help customers access information and manage their finances in real time. During the year, we launched Insurance and Credit Card apps and enhanced the My Argos Card app, improving customer experience and reducing costs. We will continue to enhance our digital offer over the coming year.
While we expect the banking market to remain competitive, we are well positioned to grow revenue and increase customer loyalty. We will continue to grow our mortgage business and maintain our cautious approach to unsecured lending, focusing on customers with a Nectar card and on increasing Argos Financial Services sales . Priority 4: Generate efficiencies to invest in our digital future
Over the last four years we have built a business serving customers with a broader range of products and services. We offer great quality at fair prices across food, grocery, general merchandise and clothing. Through our network of well-located supermarkets, convenience and Argos stores, our online offer and our delivery network, customers can shop with us whenever and wherever they want. We help our customers manage their finances – making it easier for them to shop with us – and we reward them for their loyalty through Nectar. This gives us unique insight into our customers across the Group, which means we can make their lives easier while rewarding them for shopping with us.
The traditional physical retail model remains under pressure. The continued shift towards online requires investment in new digital and delivery infrastructures, while physical store costs continue to rise. We are well placed to address these challenges and become more efficient. Bringing Sainsbury’s and Argos together is one example of how we have already delivered a step change in reducing our costs. In 2018/19, we delivered £220 million of cost savings in addition to the £160 million cumulative EBITDA synergies delivered through the integration of Argos.
We have an excellent store estate in great locations and, by integrating Argos stores into Sainsbury’s, we are capitalising on our property portfolio to make Argos more accessible to Sainsbury’s customers. We will continue to open Argos stores in Sainsbury’s supermarkets and build further concession partnerships to offer customers a broader range of products and services, increasing trading intensity in stores, driving additional profit and making shopping with us easier. Offering customers products and services from Specsavers, Timpsons, Explore Learning and Sushi Gourmet make our stores more attractive shopping destinations.
The next stage in delivering our strategy requires closer integration across our Group. In 2018/19 we brought together the Sainsbury’s and Argos General Merchandise commercial teams and we now have one team creating ranges, negotiating with our suppliers and selling through both the Sainsbury’s and Argos brands. Over time this will allow us to lower our costs and create efficiencies in our General Merchandise own-brand development and supply chain operations. We are developing the Argos Financial Services offer, using the expertise and capability we have in Sainsbury’s Bank. Bringing together some central functions across Sainsbury’s and Argos has reduced our costs and there is more to do in the future.
We are well positioned to benefit from the shift to online shopping in food and grocery, general merchandise, clothing and financial services. We have enhanced our digital scale and capability in recent years and, across the Group, £4.7 billion of our sales are generated online. We are developing new technologies to improve the customer experience and make shopping with us easy, fast and convenient. For example, we are focused on improving our digital financial services offer to help customers manage their finances and access the information they need in real time. During the year, we launched apps for Insurance and Credit Cards and enhanced the My Argos Card app, improving customer experience and reducing costs.
We will continue to invest in technology that will make it easier for customers to shop with us and in technology that will help us make the business more efficient. This will support our long-term profitability. We will bring our digital offer together to make it easy for customers to shop across all of our channels and access a variety of financial services products, with increasingly personalised rewards.
As we strive to make our customers’ lives easier, we will invest in innovative new services that enable them to browse, select, pay, earn rewards, save and borrow with us in just a few clicks. As well as digitising the Argos store estate, we will continue to develop technologies such as SmartShop, helping customers save time and manage their budgets.
We have also developed a number of digital tools that make it easier for our colleagues to provide good service and availability to our customers across all of our channels. For example, we improved the productivity of Sainsbury’s online pickers by 13 per cent in the last year by using technologically advanced handsets. We have introduced new apps in Sainsbury’s stores, which are helping colleagues to replenish stock and reduce waste in the most efficient way.
As part of our focus on investing in data and technology, we acquired Nectar in February 2018. Nectar has 18.5 million registered users, 1.2 million of whom actively use the Nectar app – an increase of eight per cent compared to last year. We signed up five new partners in the year, including Esso and EE, and renewed our long-term agreements with a number of key partners including eBay and Brakes. Nectar deepens our understanding of how customers are shopping across the Group, enabling us to provide more of what they want. We are trialling a new digital Nectar proposition in Wales which allows customers to collect, spend and manage their Nectar rewards using their mobile phone, making it easier and quicker for customers to shop with us.
Priority 5: Strengthen the balance sheet
We continue to maintain a strong balance sheet and have reduced net debt by £222 million to £1,636 million (including perpetual securities). This represents a decrease of £162 million before fair value movements on derivatives and exceeds our target £100 million reduction for the year. Our focus on net debt reduction will continue and we are introducing a new target to reduce this by at least £600 million over the next three years through a disciplined approach to cash generation and capital allocation13. Gross retail capital expenditure of £554 million (including Argos integration) remains low compared to the preceding five years and capex is expected to remain at around £550 million next year.
We are targeting adjusted net debt to EBITDAR (treating perpetual securities as debt) of less than three times and fixed charge cover above three times in the medium term supported by the reduction in net debt13.
The pension scheme moved from a £261 million deficit at the end of 2017/18 to a £743 million surplus at the end of 2018/19. This was a result of both experience and actuarial gains in relation to changes in demographic assumptions.
The Group has financing facilities of £3.6 billion, of which only £2.1 billion was drawn down at the year end. As a result of the repayment of the securitised loan in April 2018, net finance costs reduced by £23 million. We expect finance costs in 2019/20 to remain in line with 2018/19.
Financial Review of the full year results for the 52 weeks to 9 March 2019
2018/19 has been another year of progress against our strategic priorities which saw us deliver strong growth in underlying profit and retail free cashflow and a reduction in net debt ahead of expectations. During the year we completed the Argos integration programme and delivered the target synergies nine months ahead of schedule, consolidated the Nectar business following the acquisition in 2017/18 and completed a significant management reorganisation in Sainsbury’s stores.
In a highly competitive market Sainsbury’s underlying Group sales (including VAT) were up 2.1 per cent to £32,412 million. On a 52-week rolling basis Sainsbury’s grocery market share (as measured by Kantar) declined 37 basis points with the discounters and Co-op gaining share from the rest of the market largely as a result of new store openings. Argos sales grew, outperforming a declining and highly competitive general merchandise market (as measured by the British Retail Consortium, ‘BRC’). Tu clothing held share as sales declined in line with the market whilst full price sales increased as a result of reduced promotional activity.
In 2018/19, retail underlying EBITDAR margin increased eight basis points to 7.52 per cent and retail underlying operating margin improved 19 basis points to 2.43 per cent. Underlying profit before tax (‘UPBT’) increased by 7.8 per cent to £635 million (2017/18: £589 million) driven by strong retail underlying profit growth and reduced interest costs, partly offset by lower Financial Services profit. Profit after tax of £219 million (2017/18: £309 million) was down 29.1 per cent as a result of a £396 million charge recognised outside of underlying profit. This charge includes the restructuring charge for changes to Sainsbury’s store operations implemented during the year, the final Argos integration costs, Sainsbury’s Bank transition costs, Asda transaction costs and a £98 million pension provision following the guaranteed minimum pensions ruling.
£220 million of cost savings were delivered during the year to offset the impact of cost inflation and the increase in Sainsbury’s colleague base rate of pay to a market leading £9.20 per hour. We have well developed plans in place to continue to deliver efficiencies to offset cost inflation in future years.
Financials Services underlying operating profits decreased to £31 million, as guided in May 2018 (2017/18: £69 million), primarily due to additional bad debt charges following the adoption of IFRS 9 as well as a more cautious approach to unsecured lending and higher costs. We have focused on growing our mortgage book and commission products and have seen Bank customer numbers grow by five per cent and customer lending increase by £1.3 billion, driven mainly by mortgage balance growth. Argos Financial Services customer numbers increased by six per cent.
The balance sheet remains strong with a further reduction in net debt. Net debt (including perpetual securities) was £1,636 million as at 9 March 2019 (10 March 2018: £1,858 million), a total decrease of £222 million in the year and a decrease of £162 million before fair value movements on derivatives, ahead of our guidance of £100 million reduction. The business generated retail free cash flow of £461 million which resulted in a dividend cash cover of 2.1. We will remain disciplined and focused on cash management, taking action to reduce net debt. We are aiming to reduce net debt by at least a further £600 million over the next three years. The Group has facilities of £3.6 billion with only £2.1 billion drawn at the end of the year.
The Group pension scheme IAS 19 accounting surplus (net of deferred tax) improved to £743 million (2017/18: £261 million deficit) as at 09 March 2019 as a result of both experience and actuarial gains in relation to changes in mortality assumptions.
Underlying basic earnings per share increased 7.8 per cent to 22.0 pence (2017/18: 20.4 pence). Basic earnings per share decreased 31.6 per cent to 9.1 pence (2017/18: 13.3 pence) due to the £396 million charge recognised outside of underlying results.
The Board has recommended a final dividend of 7.9 pence (2017/18: 7.1 pence), resulting in a full-year dividend of 11.0 pence per share (2017/18: 10.2 pence per share), an increase of 7.8 per cent.
13. Stated before the impact of IFRS 16
Summary income statement
52 weeks to
52 weeks to
9 March
10 March
Change
2019
2018
£m
£m
%
Underlying Group sales (including VAT)
32,412
31,735
2.1
Underlying Retail sales (including VAT)
31,871
31,220
2.1
Underlying Group sales (excluding VAT) 1
29,007
28,453
1.9
Underlying Retail sales (excluding VAT) 2
28,466
27,938
1.9
Underlying operating profit
Retail
692
625
10.7
Financial services
31
69
(55.1)
Total underlying operating profit
723
694
4.2
Underlying net finance costs 3
(96)
(119)
19.3
Underlying share of post-tax profit from JVs 4
8
14
(42.9)
Underlying profit before tax
635
589
7.8
Items excluded from underlying results
(396)
(180)
(120.0)
Profit before tax
239
409
(41.6)
Income tax expense
(20)
(100)
80.0
Profit for the financial period
219
309
(29.1)
Underlying basic earnings per share
22.0p
20.4p
7.8
Basic earnings per share
9.1p
13.3p
(31.6)
Dividend per share
11.0p
10.2p
7.8
1. 2017/18 underlying Group revenue of £28,459 million, disclosed in note 4 of the accounts, includes £6 million of revenue consolidated post the acquisition of Nectar that is excluded from the underlying Group sales.
2. 2017/18 underlying retail revenue of £27,944 million, disclosed in note 4 of the accounts, includes £6 million of revenue consolidated post the acquisition of Nectar that is excluded from the underlying retail sales.
3. Net finance costs including perpetual securities coupons before non-underlying finance movements.
4. The underlying share of post-tax profit from joint ventures and associates (‘JVs’) is stated before investment property fair value movements, non-underlying finance movements and profit on disposal of properties.
Group sales
Underlying Group sales (including VAT, including fuel) increased by 2.1 per cent year-on-year. Underlying retail sales (including VAT, including fuel) increased by 2.1 per cent. Retail sales (including VAT, excluding fuel) increased by 0.4 per cent driven by new space. Fuel sales grew 12.3 per cent, driven by both retail price inflation and volume growth.
Total sales performance by category
52 weeks to
52 weeks to
9 March 2019
10 March 2018
Change
£m
£m
%
Grocery
19,453
19,330
0.6
General Merchandise
6,561
6,561
0.0
Clothing
953
961
(0.8)
Retail (exc. fuel)
26,967
26,852
0.4
Fuel sales
4,904
4,368
12.3
Retail (inc. fuel)
31,871
31,220
2.1
Grocery and General Merchandise sales grew in the first half, benefitting from the hot summer, with a more subdued performance in the second half of the year. Grocery sales grew by 0.6 per cent year-on-year driven by retail price inflation and improved sales mix, partly offset by volume decline. General Merchandise sales were flat year-on-year in a highly competitive market. Clothing sales declined by 0.8 per cent due to reduced promotional activity whilst full price sales increased.
Convenience sales growth was nearly four per cent, primarily driven by like-for-like growth, with fewer new store openings than the prior year. Groceries Online sales growth was nearly seven per cent, driven by order growth. Supermarkets (including Argos stores in Sainsbury’s) sales increased by one per cent, driven by supermarket space being repurposed to Argos.
Total sales performance by channel
52 weeks to
52 weeks to
9 March 2019
10 March 2018
Supermarkets (inc. Argos stores in Sainsbury’s) 1
1.0%
2.1%
Convenience
3.7%
7.5%
Groceries Online
6.9%
6.8%
1. Supermarkets channel includes sales from Argos stores installed in a Sainsbury’s supermarket with the comparative for the 52 weeks to 10 March 2018 adjusted to be presented on a consistent basis.
Retail like-for-like sales (excluding fuel) decreased by 0.2 per cent (2017/18: 1.3 per cent increase) mainly as a result of like-for-like sales declines in General Merchandise and Clothing.
Retail like-for-like sales performance
52 weeks to
52 weeks to
9 March 2019
10 March 2018
Like-for-like sales (exc. fuel)
(0.2)%
1.3%
Like-for-like sales (inc. fuel)
1.5%
1.4%
Space
In 2018/19 Sainsbury’s opened three new supermarkets and closed three (2017/18: three new supermarkets opened and none closed). Sainsbury’s opened 10 new convenience stores in the year and closed five (2017/18: 24 stores opened and 15 closed).
The 191,000 sq ft reduction in Sainsbury’s supermarket space is mainly driven by 164,000 sq ft repurposed to Argos stores in Sainsbury’s. During the year Argos opened 90 new stores in Sainsbury’s and closed 46 stand-alone Argos stores. The number of Argos collection points in Sainsbury’s stores increased to 317, with 169 openings partially offset by 44 closures replaced by Argos stores in supermarkets. As at 9 March 2019, Argos had 833 stores and 317 collection points of which 207 are within Sainsbury’s convenience stores. Habitat continues to trade 16 stores.
Store numbers and retailing space
As at
New stores
Disposals / closures
Extensions / refurbishments / downsizes
As at
10 March
9 March
2018
2019
Supermarkets
608
3
(3)

608
Supermarkets area ‘000 sq ft
21,296
158
(53)
(191)
21,210
Convenience
815
10
(5)

820
Convenience area ‘000 sq ft
1,913
29
(9)
1
1,934
Sainsbury’s total store numbers
1,423
13
(8)

1,428
Argos stores
639
1
(46)

594
Argos stores in Sainsbury’s
191
90


281
Argos in Homebase
14

(6)

8
Argos total store numbers
844
91
(52)

883
Argos collection points
192
169
(44)

317
Habitat
16
2
(2)

16
In 2019/20, Sainsbury’s expects to open two new supermarkets and around 10 new convenience stores.
In 2019/20, Sainsbury’s expects to open around 10 Argos stores in supermarkets (of which three are relocations) resulting in around 290 Argos stores in supermarkets.
Retail underlying operating profit
Retail underlying operating profit increased by 10.7 per cent to £692 million (2017/18: £625 million).
Retail underlying operating margin improved by 19 basis points year-on-year to 2.43 per cent (2017/18: 2.24 per cent), equivalent to a 21 basis point increase at constant fuel prices.
Retail underlying operating profit
52 weeks to
52 weeks to
Change at
9 March
10 March
constant fuel
2019
2018
Change
Prices
Retail underlying operating profit (£m) 1
692
625
10.7%
Retail underlying operating margin (%) 2
2.43
2.24
19bps
21bps
Retail underlying EBITDAR (£m) 3
2,140
2,078
3.0%
Retail underlying EBITDAR margin (%) 4
7.52
7.44
8bps
15bps
1. Retail underlying earnings before interest, tax and Sainsbury’s underlying share of post-tax profit from joint ventures.
2. Retail underlying operating profit divided by underlying retail sales excluding VAT.
3. Retail underlying operating profit before rent of £733 million (2017/18: £740 million) and underlying depreciation and amortisation of £715 million (2017/18: £713 million).
4. Retail underlying EBITDAR divided by underlying retail sales excluding VAT.
In 2019/20, Sainsbury’s expects cost inflation of around three per cent and will continue to deliver cost savings to offset the impact.
In 2019/20, Sainsbury’s expects an underlying retail depreciation and amortisation charge of around £720 million (2018/19: £715 million).
Synergies arising from the acquisition of Argos
In 2018/19, Sainsbury’s achieved the target £160 million cumulative EBITDA synergies (£150 million EBIT), of which £73 million (£68 million EBIT) were incremental to prior years. The three-year target £160 million was achieved nine months ahead of schedule.
Total exceptional costs of £276 million were incurred to deliver the synergies over the course of the integration programme, in line with guidance.
Financial Services
Financial Services results
12 months to 28 February
2019
2018
Change
Underlying revenue (£m)
541
515
5%
Interest and fees payable (£m)
(102)
(64)
59%
Total income (£m)
439
451
(3) %
Underlying operating profit (£m)
31
69
(55) %
Cost:income ratio (%)
71
70
(100)bps
Active customers (m) – Bank
2.02
1.92
5%
Active customers (m) – AFS
2.06
1.95
6%
Net interest margin (%) 1
3.8
4.9
(110)bps
Bad debt as a percentage of lending (%) 2
1.6
1.3
(30)bps
Tier 1 capital ratio (%) 3
13.7
14.1
(40)bps
Total capital ratio (%) 4
16.7
17.1
(40)bps
Customer lending (£m) 5
6,987
5,691
23%
Customer deposits (£m)
(5,950)
(4,980)
19%
1. Net interest receivable divided by average interest-bearing assets.
2. Bad debt expense divided by average net lending.
3. Common equity Tier 1 capital divided by risk-weighted assets.
4. Total capital divided by risk-weighted assets.
5. Amounts due from customers at the Balance Sheet date in respect of loans, mortgages, credit cards and store cards net of provisions.
Financial Services total income decreased by three per cent, as higher interest and commission income was offset by increased interest payable. Financial Services underlying operating profit decreased by 55 per cent year-on-year to £31 million, in line with previous guidance, as a result of additional bad debt charges (largely due to IFRS 9 adoption), a more cautious approach to unsecured lending and higher costs.
Financial Services cost:income ratio has increased by 100 basis points due to an increase in administrative expenses. This was principally driven by higher operating expenses and amortisation relating to the new banking platforms brought into use as the Bank migrates away from Lloyds Banking Group. The number of active Bank customers increased by five per cent year-on-year to 2.02 million (2017/18: 1.92 million).
Net interest margin decreased by 110 basis points year-on-year to 3.8 per cent (2017/18: 4.9 per cent) driven by margin pressure and mix of business. This was largely due to the launch of mortgages and the issuance of Tier 2 loan notes in 2017/18. Bad debt levels as a percentage of lending increased to 1.6 per cent (2017/18: 1.3 per cent) primarily driven by the impact of IFRS 9 on the bad debt charge. However underlying arrears remain low relative to competitors and have remained stable year on year.
The CET 1 capital ratio decreased by 40 basis points year-on-year to 13.7 per cent (2017/18: 14.1 per cent), reflecting lending growth partially offset by the effect of additional funds contributed from the Parent in the prior financial year.
Customer lending increased by 23 per cent to £6,987 million, mainly due to growth in mortgages which were launched in 2017. Customer deposits increased by 19 per cent to £5,950 million.
Transition costs of £70 million were £10 million lower than previous guidance of £80 million. Sainsbury’s Bank transition costs in 2019/20 are expected to be around £30 million, £10 million of which is a result of the underspend in 2018/19.
Financial Services underlying operating profit is expected to be around £45 million in 2019/20, including a £10 million benefit as a result of a change in transfer pricing between Argos and Argos Financial Services.
Capital injections into the Bank are expected to be £80 million in 2019/20. This is to cover card and loan platforms, regulatory capital and growth in loan, card and mortgage balances.
Underlying net finance costs
Underlying net finance costs reduced by 19 per cent to £ 96 million (2017/18: £119 million), driven by the £568 million repayment in April 2018 of the securitised loan taken out in 2006.
Sainsbury’s expects net finance costs in 2019/20 to be in line with 2018/19.
Joint ventures
Share of underlying profit from joint ventures was £8 million (2017/18: £14 million). The reduction is mainly driven by the previously reported Insight 2 Communication business now fully consolidated following the acquisition of Nectar, and reduced British Land profits due to property disposals during the year.
Items excluded from underlying results
In order to provide shareholders with insight into the underlying performance of the business, items recognised in reported profit or loss before tax which, by virtue of their size and or nature, do not reflect the Group’s underlying performance are excluded from the Group’s underlying results and shown in the table below.
Items excluded from underlying results
52 weeks to
52 weeks to
9 March
10 March
2019
2018
£m
£m
Sainsbury’s Bank transition
(70)
(38)
Argos integration
(40)
(85)
Property-related
(22)
12
Restructuring costs
(81)
(85)
Asda transaction costs
(46)

Defined benefit pension expenses
(118)
(5)
Other
(19)
21
Items excluded from underlying results
(396)
(180)
· Sainsbury’s Bank transition costs of £70 million were part of the previously announced costs incurred in transitioning to a new, more flexible banking platform and will complete in the first half of 2019/20.
· Argos integration costs for the year of £40 million were part of the previously announced requirement over three years and are now complete.
· Property-related items of £22 million comprise losses on disposal of properties and investment property fair value movements.
· Retail restructuring costs in the year of £81 million relate to previously announced material changes to Sainsbury’s management and store colleague structures and working practices.
· £46 million of transaction costs were incurred in relation to the proposed combination with Asda, and principally comprised deal preparation, integration preparation and financing.
· Following a High Court judgment in October 2018 relating to Lloyds Banking Group, Sainsbury’s was required to recognise a guaranteed minimum pension provision of £98 million for the estimated cost of equalising historic pension benefits between men and women. The £98 million charge is non-cash and does not impact contractual pension contributions. In addition, £20 million was recognised in relation to pension scheme expenses and financing charges.
· Other includes the unwind of non-cash fair value adjustments arising on previous acquisitions of Sainsbury’s Bank, Home Retail Group and Nectar UK acquisitions.
In 2019/20 cash outflows as a result of items excluded from underlying results should not exceed £100 million.
Taxation
The tax charge was £20 million (2017/18: £100 million), with an underlying tax rate of 23.8 per cent (2017/18: 24.1 per cent) and an effective tax rate of 8.4 per cent (2017/18: 24.4 per cent).
The underlying tax rate was lower year-on-year, partly due a reduction in the statutory tax rate.
The effective tax rate in 2018/19 decreased to 8.4 per cent, mainly due to prior year adjustments to current and deferred tax. This includes a prior year deferred tax credit of £50 million arising on the recognition of a previously unrecognised capital loss.
In 2019/20, Sainsbury’s expects the full-year underlying tax rate to be around 24 per cent.
Earnings per share
Underlying basic earnings per share increased to 22.0 pence (2017/18: 20.4 pence) driven by the increase in underlying earnings year-on-year. Basic earnings per share decreased to 9.1 pence (2017/18: 13.3 pence), mainly as a result of the £396 million charge for items excluded from underlying results (2017/18: £180 million charge), offset by a lower effective tax rate.
Dividends
The Board has recommended a final dividend of 7.9 pence per share (2017/18: 7.1 pence). This will be paid on 12 July 2019 to shareholders on the Register of Members at the close of business on 7 June 2019. In line with the Group’s policy to keep the dividend covered two times by underlying earnings, this will result in an increased full-year dividend of 11.0 pence (2017/18: 10.2 pence).
Sainsbury’s plans to maintain a full-year dividend covered two times by our full-year underlying earnings.
Net debt and retail cash flows
Group net debt includes the impact of capital injections into Sainsbury’s Bank, but excludes Financial Services’ own net debt balances. Financial Services balances are excluded because they are required for business as usual activities. As at 9 March 2019, net debt (including perpetual securities as debt) was £1,636 million (10 March 2018: £1,858 million), a decrease of £222 million.
Summary cash flow statement 1
Retail
Retail
52 weeks to
52 weeks to
9 March
10 March
2019
2018
£m
£m
Adjusted retail operating cash flow before changes in working capital 2,3
1,264
1,193
(Increase)/decrease in working capital
(45)
196
Cash generated from retail operations 4
1,219
1,389
Pension cash contributions
(63)
(130)
Net interest paid 5
(89)
(105)
Corporation tax paid
(61)
(72)
Net cash generated from retail operating activities
1,006
1,082
Cash capital expenditure before strategic capital expenditure 6
(512)
(542)
Proceeds from disposal of property, plant and equipment
64
54
Bank capital injections
(110)
(190)
Dividends and distributions received from JVs net of capital injections
13
28
Retail free cash flow
461
432
Dividends paid on ordinary shares
(224)
(212)
Strategic capital expenditure – Argos integration 5
(36)
(80)
Acquisition of subsidiaries 5

135
Repayment of borrowings including finance leases 5
(451)
(174)
Other 5
(8)
(2)
Net increase/(decrease) in cash and cash equivalents
(258)
99
Decrease in debt
451
174
Acquisition movements

(15)
Other non-cash and net interest movements 7
(31)
(22)
Movement in net debt before fair value movements on derivatives
162
236
Fair value movements on derivatives
60
(123)
Movement in net debt
222
113
Opening net debt
(1,364)
(1,477)
Closing net debt
(1,142)
(1,364)
Closing net debt (inc. perpetual securities as debt)
(1,636)
(1,858)
1. See note 4 for a reconciliation between the Retail and Group cash flows.
2. Excludes working capital and pension cash contributions.
3. 2017/18 adjustment of £21 million relating to non-cash pension scheme expenses previously included in retirement benefit obligations. No impact to net cash generated from retail operating activities.
4. Excludes pension contributions.
5. Refer to the Alternative Performance Measures on page 185 for reconciliation.
6. Excludes Argos integration capital expenditure.
7. Net interest excluding dividends paid on perpetual securities.
Adjusted retail operating cash flow before changes in working capital increased by £71 million year-on-year to £1,264 million (2017/18: £1,193 million) due to higher retail underlying operating profit partially offset by retail one-off items. Working capital increased by £45 million (2017/18: £196 million decrease). Capital expenditure before strategic capital expenditure was £ 512 million (2017/18: £542 million) driven by a reduction in Sainsbury’s core retail capital expenditure. Bank capital injections reduced to £110 million (2017/18: £190 million).
Retail free cash flow increased by £29 million year-on-year to £461 million (2017/18: £432 million). Free cash flow was used to fund dividends and repay debt. Dividends of £224 million were paid in the year, which are covered 2.1 times by free cash flow (2017/18: 2.0 times). Strategic capital expenditure relating to Argos integration capital expenditure was £36 million, £44 million lower year-on-year (2017/18: £80 million) driven by the completion of the Argos integration programme.
Net debt before fair value movements on derivatives reduced by £ 162 million in the year (2017/18: £236 million reduction). Fair value movements on derivatives of £60 million were primarily driven by an increase in the value of US Dollar foreign exchange derivatives held to mitigate the Group’s exposure to fluctuations in US Dollar denominated purchases. The weighted average hedge rate (‘WAHR’) at 9 March 2019 was above the spot rate, generating an unrealised fair value gain (2017/18: unrealised loss as the WAHR at 10 March 2018 below the spot rate).
As at 9 March 2019, Sainsbury’s had drawn debt facilities of £2.1 billion including the perpetual securities (2017/18: £2.5 billion) and additional undrawn committed credit facilities of £1.4 billion. The Group also held £85 million of uncommitted facilities, which were undrawn as at 9 March 2019. In April 2018, Sainsbury’s repaid debt of £568 million in relation to Commercial Mortgage Backed Securities.
Sainsbury’s expects 2019/20 year-end net debt before fair value movements on derivatives to reduce by at least £200 million. Sainsbury’s is targeting to reduce net debt by at least £600 million over the next three years. 1
Sainsbury’s is targeting adjusted net debt to EBITDAR (treating the perpetual securities as debt) to reduce to below three times in the medium term. 1
Sainsbury’s is targeting fixed charge cover of more than three times in the medium term. 1
Capital expenditure
Retail capital expenditure (including Argos integration capital expenditure) was £554 million (2017/18: £629 million), the decrease driven by the completion of the Argos integration programme and reduced new store development. Retail capital expenditure (excluding Argos integration) was £518 million (2017/18: £549 million). Retail capital expenditure net of proceeds was £490 million (2017/18: £575 million)
In 2019/20, Sainsbury’s expects gross retail capital expenditure to be around £550 million. Proceeds from disposal of property, plant and equipment are expected to be in line with 2018/19.
Gross retail capital expenditure is expected to be around £550 million per annum over the medium term.
1. Stated before the impact of IFRS 16
Retail capital expenditure
52 weeks to
52 weeks to
9 March
10 March
2019
2018
£m
£m
Core capital expenditure
(518)
(549)
Strategic capital expenditure – Argos integration
(36)
(80)
Gross capital expenditure
(554)
(629)
Proceeds from the disposal of property, plant and equipment
64
54
Net capital expenditure
(490)
(575)
Financial ratios
Key financial ratios 1
As at
As at
9 March
10 March
2019
2018
Return on capital employed (%) 2
8.5
8.4
Return on capital employed (exc. pension surplus) (%) 2
8.5
7.7
Adjusted net debt to EBITDAR 3,4,5
3.2 times
3.3 times
Interest cover 5
7.6 times
5.9 times
Fixed charge cover 6
2.7 times
2.5 times
Gearing 7
13.5%
18.4%
Gearing (exc. pension surplus) 8
14.8%
17.8%
Key financial ratios
(with perpetual securities treated as debt) 9
Adjusted net debt to EBITDAR
3.5 times
3.6 times
Gearing
20.5%
26.9%
Gearing (exc. pension surplus)
22.7%
25.9%
Key financial ratios
(with perpetual securities coupons excluded from net underlying finance costs)
Interest cover 10
10.1 times
7.4 times
Fixed charge cover 11
2.7 times
2.6 times
1. These metrics have been prepared on a pre-IFRS 16 basis. IFRS 16 is effective for all accounting periods beginning on or after 1 January 2019. For Sainsbury’s the first reported accounting period under IFRS 16 will be the 2019/20 financial year.
2. The 14 point period includes the opening capital employed as at 10 March 2018 and the closing capital employed for each of the 13 individual four-week periods to 9 March 2019.
3. Net debt of £1,142 million (2017/18: £1,364 million) plus capitalised lease obligations of £6,009 million (2017/18: £5,931 million), divided by Group underlying EBITDAR of £2,202 million (2017/18: £2,181 million), calculated for a 52-week period to 9 March 2019. Perpetual securities treated as equity.
4. 2017/18 capitalised lease obligations of £5,931 million have been updated following a review of lease cost profile. This does not impact total lease obligations of £10 billion.
5. Underlying profit before interest and tax divided by underlying net finance costs, where interest on perpetual securities is included in underlying finance costs.
6. Group underlying EBITDAR divided by net rent and underlying net finance costs, where interest on perpetual securities is included in underlying finance costs.
7. Net debt divided by net assets. Perpetual securities treated as equity.
8. Net debt divided by net assets, excluding pension surplus/deficit. Perpetual securities treated as equity.
9. On a statutory basis, the perpetual securities are accounted for as equity on the Balance Sheet. Treating the perpetual securities, net of transaction fees, as debt increases net debt to £1,636 million (2017/18: £1,858 million), and reduces net assets to £7,962 million (2017/18: £6,917 million).
10. Underlying profit before interest and tax divided by underlying net finance costs, where interest on perpetual securities is excluded from underlying finance costs.
11. Group underlying EBITDAR divided by net rent and underlying net finance costs, where interest on perpetual securities is excluded from underlying finance costs.
Property value
As at 9 March 2019, Sainsbury’s estimated market value of properties, including its 50 per cent share of properties held within property joint ventures, was £10.4 billion (10 March 2018: £10.5 billion), the reduction due to a shift in the yield.
Since the year-end, Sainsbury’s has agreed the sale of 12 supermarkets from the joint venture with British land to Realty Income Corporation. This will reduce the value of the property portfolio by £0.2 billion.
Defined benefit pensions
At 9 March 2019, the net defined benefit surplus for the Group was £743 million (including the unfunded obligation and adjusting for associated deferred tax). The £1,004 million movement from deficit to surplus from 10 March 2018 was primarily driven by experience gains of £644 million and actuarial gains of £547 million in relation to changes in demographic assumptions, partially offset by a deferred income tax liability of £216 million. Both gains have been recognised within other comprehensive income.
The experience gains are as a result of updating the underlying membership data behind the actuarial calculations to that used for the September 2018 triennial valuation. The gain due to demographic assumptions reflects updating the mortality assumptions to the most recent available data as at the balance sheet date.
Under the Recovery Plans agreed as part of the 2015 triennial valuation process Sainsbury’s is contracted to make contributions totalling £124 million in 2019/20 which includes the £19 million coupon from Sainsbury’s Property Scottish Partnership. The 2018 triennial valuation is currently being agreed with the Trustee.
Retirement benefit obligations
Sainsbury’s
Argos
Group
Group
as at
as at
as at
as at
9 March
9 March
9 March
10 March
2019
2019
2019
2018
£m
£m
£m
£m
Present value of funded obligations
(7,654)
(1,202)
(8,856)
(10,028)
Fair value of plan assets
8,759
1,224
9,983
9,884
Additional liability due to IFRIC 14

(134)
(134)
(78)
Pension surplus/(deficit)
1,105
(112)
993
(222)
Present value of unfunded obligations
(20)
(14)
(34)
(35)
Retirement benefit obligations
1,085
(126)
959
(257)
Deferred income tax (liability)/asset
(241)
25
(216)
(4)
Net retirement benefit obligations
844
(101)
743
(261)
IFRS 16 leases
The new IFRS 16 lease standard applies to the Group for the first time in 2019/20. The Group has chosen to adopt IFRS 16 on a fully retrospective basis and the first reporting under IFRS 16 (with restated comparatives) will be the Group’s interim results as at 21 September 2019.
The new standard represents a significant change in the accounting and reporting for leases, impacting the income statement and balance sheet as well as statutory and other performance metrics used by the Group. The work is nearing completion and the Group estimates that adopting IFRS 16 will have the following impact on the consolidated balance sheet at 10 March 2018:
· Recognition of a right of use asset in the region of £5.1 billion.
· Recognition of a lease liability in the region of £5.9 billion.
· Other balance sheet adjustments of around £0.1 billion and an adjustment to opening reserves in the region of £0.9 billion (pre-tax).
These adjustments have no impact on cash and are not expected to have any impact on the Group’s ability to continue to pay dividends to shareholders.
The lease liability adjustment to the balance sheet is broadly consistent with the adjustment made in the Group’s adjusted net debt to EBITDAR metrics. Following the adoption of IFRS 16, these metrics are therefore expected to remain unchanged. 1
Subject to the completion of our work, we expect restated 2018/19 underlying profit before tax to be in the region of £30 million lower than under the current accounting standards.
We will provide a full update on the IFRS 16 restatement impacts ahead of the 2019/20 interim results.
Further details of the impacts of IFRS 16 are included in Note 1 on page 101.
1 Unless otherwise stated, all other forward guidance throughout this document is stated before the impact of IFRS 16.
Consolidated income statement
for the 52 weeks to 9 March 2019
2019
2018
Note
£m
£m
Revenue
4
29,007
28,456
Cost of sales
(27,000)
(26,574)
Gross profit
2,007
1,882
Administrative expenses
(1,733)
(1,415)
Other income
38
51
Operating profit
312
518
Finance income
6
22
19
Finance costs
6
(99)
(140)
Share of post-tax profit from joint ventures and associates
4
12
Profit before tax
239
409
Analysed as:
Underlying profit before tax
3
635
589
Non-underlying items
3
(396)
(180)
239
409
Income tax expense
7
(20)
(100)
Profit for the financial year
219
309
Earnings per share
8
Pence
Pence
Basic earnings
9.1
13.3
Diluted earnings
8.9
12.7
Underlying basic earnings
22.0
20.4
Underlying diluted earnings
20.3
19.1
Consolidated statement of comprehensive income
for the 52 weeks to 9 March 2019
2019
2018
Note
£m
£m
Profit for the financial year
219
309
Items that will not be reclassified subsequently to the income statement
Remeasurement on defined benefit pension schemes
12
1,269
592
Current tax relating to items not reclassified

19
Deferred tax relating to items not reclassified
(216)
(118)
1,053
493
Items that may be reclassified subsequently to the income statement
Currency translation differences
1
(4)
Movements on financial assets at fair value through other comprehensive income
55
14
Items reclassified from financial assets at fair value through other comprehensive income reserve
(10)
2
Cash flow hedges effective portion of fair value movements
71
(139)
Items reclassified from cash flow hedge reserve
(45)
50
Current tax on items that may be reclassified
2

Deferred tax relating to items that may be reclassified
(15)
13
59
(64)
Total other comprehensive income for the year (net of tax)
1,112
429
Total comprehensive income for the year
1,331
738
Consolidated balance sheet
At 9 March 2019 and 10 March 2018
2019
2018
Note
£m
£m
Non-current assets
Property, plant and equipment
9,708
9,898
Intangible assets
1,044
1,072
Investments in joint ventures and associates
205
232
Financial assets at fair value through other comprehensive income
645
540
Other receivables
33
44
Amounts due from Financial Services customers
3,349
2,332
Derivative financial instruments
9
17
Net retirement benefit surplus
12
959

15,952
14,135
Current assets
Inventories
1,929
1,810
Trade and other receivables
661
744
Amounts due from Financial Services customers
3,638
3,360
Financial assets at fair value through other comprehensive income
211
203
Derivative financial instruments
21
10
Cash and cash equivalents
10
1,121
1,730
7,581
7,857
Assets held for sale
8
9
7,589
7,866
Total assets
23,541
22,001
Current liabilities
Trade and other payables
(4,444)
(4,322)
Amounts due to Financial Services customers and other deposits
(5,797)
(4,841)
Borrowings
(832)
(638)
Derivative financial instruments
(17)
(53)
Taxes payable
(204)
(247)
Provisions
(123)
(201)
(11,417)
(10,302)
Net current liabilities
(3,828)
(2,436)
Non-current liabilities
Other payables
(340)
(313)
Amounts due to Financial Services customers and other deposits
(1,804)
(1,683)
Borrowings
(950)
(1,602)
Derivative financial instruments
(17)
(26)
Deferred income tax liability
(397)
(241)
Provisions
(160)
(166)
Net retirement benefit obligations
12

(257)
(3,668)
(4,288)
Net assets
8,456
7,411
Equity
Called up share capital
630
627
Share premium account
1,147
1,130
Merger reserve
568
568
Capital redemption reserve
680
680
Other reserves
172
121
Retained earnings
4,763
3,789
Total equity before perpetual securities
7,960
6,915
Perpetual capital securities
248
248
Perpetual convertible bonds
248
248
Total equity
8,456
7,411
Consolidated cash flow statement
for the 52 weeks to 9 March 2019
2019
2018
Note
£m
£m
Cash flows from operating activities
Profit before tax
239
409
Net finance costs
6
77
121
Share of post-tax profit from joint ventures and associates
(4)
(12)
Operating profit
312
518
Adjustments for:
Depreciation expense
649
659
Amortisation expense
143
72
Non-cash adjustments arising from acquisitions (excluding depreciation and amortisation)
3
(2)
1
Financial Services impairment losses on loans and advances
98
68
Loss/(profit) on sale of properties
3
17
(11)
Loss on disposal of intangibles

2
Profit on disposal of joint ventures

(4)
Impairment charge of property, plant and equipment
3
3

Share-based payments expense
39
33
Non-cash defined benefit scheme expenses
12
108
(21)
Cash contributions to defined benefit scheme
12
(63)
(130)
Operating cash flows before changes in working capital
1,304
1,187
Changes in working capital
Increase in inventories
(118)
(36)
Increase in current financial assets at fair value through other comprehensive income
(97)
(192)
Decrease/(increase) in trade and other receivables
74
(44)
Increase in amounts due from Financial Services customers and other deposits
(1,480)
(1,161)
Increase in trade and other payables
94
142
Increase in amounts due to Financial Services customers and other deposits
1,077
1,602
(Decrease)/increase in provisions and other liabilities
(105)
28
Cash generated from operations
749
1,526
Interest paid
(63)
(89)
Corporation tax paid
(68)
(72)
Net cash generated from operating activities
618
1,365
Cash flows from investing activities
Purchase of property, plant and equipment
(478)
(561)
Purchase of intangible assets
(116)
(140)
Proceeds from disposal of property, plant and equipment
64
54
Proceeds from financial assets at fair value through other comprehensive income
39

Acquisition of subsidiaries, net of cash acquired

135
Investment in joint ventures
(5)
(9)
Interest received
4
14
Dividends and distributions received
18
37
Net cash used in investing activities
(474)
(470)
Cash flows from financing activities
Proceeds from issuance of ordinary shares
22
12
Repayment of borrowings
(593)
(148)
Proceeds from borrowings
135
174
Purchase of own shares
(30)
(14)
Repayment of capital element of obligations under finance lease borrowings
(32)
(26)
Interest elements of obligations under finance lease payments
(7)
(7)
Dividends paid on ordinary shares
9
(224)
(212)
Dividends paid on perpetual securities
(23)
(23)
Net cash used in financing activities
(752)
(244)
Net (decrease)/increase in cash and cash equivalents
(608)
651
Opening cash and cash equivalents
1,728
1,077
Closing cash and cash equivalents
10
1,120
1,728
Consolidated statement of changes in equity
for the 52 weeks to 9 March 2019
Called up share capital
Share premium account
Merger reserve
Capital redemption and other reserves
Retained earnings
Total equity before perpetual securities
Perpetual capital securities
Perpetual convertible bonds
Total equity
Note
£m
£m
£m
£m
£m
£m
£m
£m
£m
At 11 March 2018
627
1,130
568
801
3,789
6,915
248
248
7,411
Day 1 accounting adjustments (net of tax) 1




(74)
(74)


(74)
Profit for the year




201
201
12
6
219
Other comprehensive income



59
1,053
1,112


1,112
Total comprehensive income for the year ended 9 March 2019



59
1,180
1,239
12
6
1,257
Transactions with owners:
Dividends
9




(224)
(224)


(224)
Distribution to holders of perpetual securities (net of tax)






(12)
(6)
(18)
Amortisation of convertible bond equity component



(8)
8




Share-based payment (net of tax)




38
38


38
Purchase of own shares




(30)
(30)


(30)
Allotted in respect of share option schemes
3
17


2
22


22
At 9 March 2019
630
1,147
568
852
4,763
7,960
248
248
8,456
At 12 March 2017
625
1,120
568
873
3,190
6,376
248
248
6,872
Profit for the year




291
291
12
6
309
Other comprehensive (expense)/income



(64)
493
429


429
Total comprehensive (expense)/income for the year ended 10 March 2018



(64)
784
720
12
6
738
Transactions with owners:
Dividends
9




(212)
(212)


(212)
Distribution to holders of perpetual securities (net of tax)






(12)
(6)
(18)
Amortisation of convertible bond equity component



(8)
8




Share-based payment (net of tax)




33
33


33
Purchase of own shares




(14)
(14)


(14)
Allotted in respect of share option schemes
2
10



12


12
At 10 March 2018
627
1,130
568
801
3,789
6,915
248
248
7,411
1. This is comprised of IFRS 9 ‘Financial Instruments’ and IFRS 15 ‘Revenue from Contracts with Customers’ day 1 adjustments. See note 2.
1 Status of financial information
The financial information, which comprises the Group income statement, Group statement of comprehensive income, Group balance sheet, Group cash flow statement, Group statement of changes in equity and related notes, is derived from the full Group financial statements for the 52 weeks to 9 March 2019 and does not constitute full accounts within the meaning of section 435 (1) and (2) of the Companies Act 2006.
The Group Annual Report and Financial Statements 2019 on which the auditors have given an unqualified report and which does not contain a statement under section 498 (2) or (3) of the Companies Act 2006, will be delivered to the Registrar of Companies in due course, and made available to shareholders in June 2019.
The financial year represents the 52 weeks to 9 March 2019 (prior financial year: 52 weeks to 10 March 2018). The consolidated financial statements for the 52 weeks to 9 March 2019 comprise the financial statements of the Company and its subsidiaries (the ‘Group’) and the Group’s share of the post-tax results of its joint ventures and associates.
Sainsbury’s Bank Plc and its subsidiaries have been consolidated for the twelve months to 28 February 2019 being the Bank’s year-end date (prior financial year: 28 February 2018). Adjustments have been made for the effects of significant transactions or events that occurred between this date and the Group’s balance sheet date.
Nectar Loyalty Holding Limited and its subsidiaries have been consolidated from 1 March 2018 to 9 March 2019 (prior financial year: four weeks to 28 February 2018). Nectar’s year-end date is now aligned with the Group.
2 Basis of preparation
The Group’s financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and International Financial Reporting Interpretations Committee (IFRIC) and with those parts of the Companies Act 2006 applicable to companies reporting under IFRSs.
The financial statements are presented in sterling, rounded to the nearest million (‘£m’) unless otherwise stated. They have been prepared on a going concern basis under the historical cost convention, except for derivative financial instruments, defined benefit pension scheme assets, investment properties and financial assets at fair value through other comprehensive income that have been measured at fair value.
The Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Amendments to published standards
Effective for the Group and Company in these financial statements:
The Group considered the following amendments to published standards that are effective for the Group for the financial year beginning 11 March 2018 and concluded that, with the exception of IFRS 9 ‘Financial Instruments’ and IFRS 15 ‘Revenue from Contracts with Customers’, they are either not relevant to the Group or they do not have a significant impact on the Group’s financial statements other than disclosures. These standards and interpretations have been endorsed by the European Union.
· Amendments to IFRS 2 ‘Share-based Payment’ on the classification and measurement of share-based payment transactions
· Amendments to IAS 40 ‘Investment Property’ on the transfers of investment property
· IFRIC Interpretation 22 ‘Foreign Currency Transactions and Advance Consideration’
· Annual Improvements Cycle 2014-2016 (issued in December 2016)
· IFRS 4 ‘Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts’
· IFRS 9 ‘Financial Instruments’
· IFRS 15 ‘Revenue from Contracts with Customers’
Further information on the impact of IFRS 9 and IFRS 15 is included below.
Standards and revisions effective for future periods:
The following standards and revisions will be effective for future periods:
· IFRS 16 ‘Leases’
· IFRIC Interpretation 23 ‘Uncertainty over Income Tax Treatments’
· Amendments to IFRS 9 ‘Financial Instruments’ on prepayment features with negative compensation
· Amendments to IAS 1 ‘Presentation of Financial Statements’ and IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’ on the definition of material
· Amendments to IAS 19 ‘Employee Benefits’ on plan amendments, curtailments or settlements
· Amendments to IAS 28 ‘Investments in Associates and Joint Ventures’ on long term interests in associates and joint ventures
· Annual Improvements Cycle 2015-2017 (issued in December 2017)
The Group has considered the impact of the remaining above standards and revisions and have concluded that, with the exception of IFRS 16, they will not have a significant impact on the Group’s financial statements. Further information on IFRS 16 is included below.
Transitional disclosures on adoption of new accounting standards
IFRS 9 ‘Financial Instruments’
IFRS 9 replaces IAS 39 for annual periods beginning on or after 1 January 2018, bringing together all three aspects of the accounting for financial instruments: classification and measurement, impairment and hedge accounting. The main changes the new standard introduces are:
· new requirements for the classification and measurement of financial assets and financial liabilities;
· a new model for recognising impairments of financial assets; and
· changes to hedge accounting by aligning hedge accounting more closely to an entity’s risk management objectives.
The changes have been applied by adjusting the Consolidated Balance Sheet at 11 March 2018, the date of initial application, with no restatement of comparative information. In accordance with IFRS 9 transition guidance, comparative financial information in the primary financial statements remains compliant with the classification and measurement requirements of IAS 39.
a. Classification and measurement
IFRS 9 introduced a principles-based approach to the classification of financial assets. Financial assets are measured at fair value through profit or loss (FVTPL), fair value through other comprehensive income (FVOCI) or amortised cost. Classification is determined by the nature of the cash flows of the assets and the business model in which they are held. These categories replace the existing IAS 39 classifications. For financial liabilities, most of the pre-existing requirements for classification and measurement previously included in IAS 39 were carried forward unchanged into IFRS 9.
An assessment of the Group’s business models was made as at the date of initial application on 11 March 2018 and applied prospectively. The changes in classification resulted in no change in measurement as at 11 March 2018 and are not expected to result in a material impact going forward. A summary of the respective classifications under IAS 39 and IFRS 9 are presented below:
Balance sheet line
Periodicity
IAS 39
IFRS 9
11 March 2018
£m
Financial assets
Financial assets at fair value through other comprehensive income
Non-current
Available for sale
Fair value through other comprehensive income
540
Financial assets at fair value through other comprehensive income
Current
Available for sale
Fair value through other comprehensive income
203
Other receivables
Non-current
Loans & receivables
Amortised cost
44
Trade and other receivables
Current
Loans & receivables
Amortised cost
553
Trade and other receivables
Current
Loans & receivables
Fair value through profit and loss 1
191
Cash and cash equivalents
Current
Loans & receivables
Amortised cost
1,580
Cash and cash equivalents
Current
Loans & receivables
Fair value through profit and loss 1
150
Amounts due from Financial Services customers
Non-current
Loans & receivables
Amortised cost 2
2,332
Amounts due from Financial Services customers
Current
Loans & receivables
Amortised cost 2
3,360
Derivative financial instruments
Non-current
Fair value through profit and loss
Fair value through
profit and loss
17
Derivative financial instruments
Current
Fair value through profit and loss
Fair value through
profit and loss
10
1. Travel money and cash in ATMs (including cash on order for ATMs) are considered separately from cash held in banks. With regard to travel money, the business model is ‘held to sell foreign currency to customers’ and the contractual cash flows are ‘margin on foreign exchange rates’. With regard to cash in ATMs, the business model is ‘held to sell ATM services’ and the contractual cash flows are ‘ATM fees’. Therefore, both assets are measured at FVPL.
2. The balances presented are consistent with those presented as at 10 March 2018. There is a day 1 adjustment to amounts due from Financial Services customers relating to the recognition of Expected Credit Loss (ECL) provisions under IFRS 9. Further details presented below.
Balance sheet line
Periodicity
IAS 39
IFRS 9
11 March 2018
£m
Financial Liabilities
Trade and other payables
Current
Loans & receivables
Amortised cost
(4,322)
Other payables
Non-current
Loans & receivables
Amortised cost
(313)
Amounts due to Financial Services customers
Non-current
Loans & receivables
Amortised cost
(1,683)
Amounts due to Financial Services customers
Current
Loans & receivables
Amortised cost
(4,841)
Borrowings
Non-current
Loans & receivables
Amortised cost
(1,602)
Borrowings
Current
Loans & receivables
Amortised cost
(638)
Derivative financial instruments
Non-current
Fair value through profit and loss
Fair value through profit and loss
(26)
Derivative financial instruments
Current
Fair value through profit and loss
Fair value through profit and loss
(53)
Similar to the requirements of IAS 39, IFRS 9 requires contingent consideration liabilities be treated as financial instruments measured at fair value.
b. Impairment
The adoption of IFRS 9 has fundamentally changed the Group’s accounting for loan loss impairments by replacing IAS 39’s incurred loss approach with a three stage forward-looking expected credit loss (ECL) approach. As soon as a financial instrument is originated or purchased, 12-month expected credit losses are recognised in profit and loss and an impairment allowance is established (Stage 1). If the credit risk increases significantly (and the resulting credit quality is not considered to be low credit risk) full lifetime expected credit losses are provided for (Stage 2). Under both Stage 1 and Stage 2, interest income is recognised on the gross carrying value of the financial asset. Financial assets move into Stage 3 when they are considered to be credit impaired, i.e. when one or more events has occurred that has a detrimental impact on the estimated future cash flows of the asset. Stage 3 assets continue to recognise lifetime expected impairment losses and interest income is recognised on the net carrying amount (i.e. gross amount less impairment allowance).
The impact of the above is to increase the impairment provisions held within the Financial Services business as at 11 March 2018 by £101 million, with a corresponding reduction to retained earnings of £84 million, net of deferred tax of £17 million. The net impact to retained earnings has been segregated within the Group statement of changes in equity.
The following table reconciles the aggregate opening movement of £101 million to the relevant line items on the balance sheet:
IAS 39 closing balance
Re-measurement on transition to IFRS 9
IFRS 9 opening balance
10 March 2018
11 March 2018
11 March 2018
£m
£m
£m
Gross advances
5,824
(15)
5,809
Impairment provision
(132)
(72)
(204)
Amounts due from Financial Services Customers
5,692
(87)
5,605
Provisions for loan commitments (within Provisions)

(14)
(14)
Total day 1 impact of IFRS 9
(101)
During the year, the Group has been refining its ECL models to better reflect information that was available at the transition date of 11 March 2018. The refinements made include:
• Amending economic scenarios included in the ECL models
• Updated cash recovery assumptions
• Calibrations of the model to reflect up to date data which was available at 11 March 2018
The above updates have been incorporated as at the transition date and as a result, the opening balance sheet adjustment of £101 million (£84 million net of tax) differs from that reported at the half year of £80 million (£66 million net of tax).
c. Hedge accounting
The Group has continued to apply the hedge accounting requirements of IAS 39 for its macro hedging relationships (applicable to the Financial Services business) and has adopted IFRS 9 in respect of its micro hedge accounting. Macro hedging concerns using instruments to address an entire balance sheet, whereas micro hedging focuses on a particular asset/liability risk. Although the micro hedge accounting requirements under IFRS 9 are generally less restrictive, this has not resulted in a material impact on the Group.
IFRS 15 ‘Revenue from Contracts with Customers’
IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers and is required for annual periods beginning on or after 1 January 2018. Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer, and supersedes all current revenue recognition requirements of IFRS.
As reported in the Annual Report for the year ended 10 March 2018, the Group performed a detailed impact assessment, identifying all current sources of revenue and analysing the accounting requirements for each under IFRS 15. The Group has adopted IFRS 15 using the full retrospective transition option. Full retrospective adoption of IFRS 15 requires comparatives to be restated in order to present values on a consistent basis. However, having quantified the impact of IFRS 15, management has assessed this impact as immaterial and has chosen not to restate the primary statements. The disclosure below sets out the impact of IFRS 15 on prior periods.
Impact on the comparative statement of financial position on the adoption of IFRS 15:
Adjustment
52 weeks to 10 March 2018
£m
Assets
Right of return assets
(a)
3
Liabilities
Provisions
(a)
(3)
Deferred revenue
(b)
10
Equity
Retained Earnings
(b)
(10)
Impact on the comparative statement of profit and loss on adoption of IFRS 15:
Adjustment
52 weeks to 10 March 2018
£m
Revenue from contracts with customers
(c)
7
Cost of sales
(c)
(7)
There is no impact on gross margin. IFRS 15 does not impact other comprehensive income, nor is there a material impact on the statement of cash flow. There is a nil impact to both basic and diluted EPS.
(a) Right of return asset & provision
Under IFRS 15, the consideration received from a customer is variable because the contract allows the customer to return the products. The Group uses the expected value method to estimate the goods that will be returned because this method best predicts the amount of variable consideration to which the Group will be entitled. The impact upon adoption of IFRS 15 for the 52 weeks to 10 March 2018 is a £3 million increase in both the right of return asset and provision. This is considered to be immaterial to the Group results and has not been restated within the comparatives on the statement of financial position.
(b) Nectar
On 1 February 2018, the Group acquired the shares of Aimia Inc’s UK business, enabling the full and independent operation of the Nectar Loyalty programme in the UK. From the point of acquisition, any points issued and redeemed in Sainsbury’s and Argos were accounted for in line with IFRIC 13 ‘Customer Loyalty Programmes’, meaning a portion of the transaction price was allocated to the loyalty programme using the fair value of points issued. There is an immaterial change to the loyalty programme upon the adoption of IFRS 15.
Under IAS 18 ‘Revenue’, programme support fees (‘PSF’) for Nectar were deferred and recognised in line with the issuances and redemption profile. However on application of IFRS 15, revenue is disaggregated against individual performance obligations. These fees are now recognised on a straight line basis over the term of the agreement with the relevant party. Applying IFRS 15 retrospectively, the brought forward deferred revenue balance includes £10 million of PSF relating to prior periods. This balance has accumulated over many years, with the year on year impact considered immaterial to the Group. This restatement has been represented as a day 1 adjustment within the statement of changes in equity.
(c) Agent vs principal
From time to time the Group enters into contracts with suppliers for which an assessment must be made to determine whether the Group is acting as principal or agent when selling the related goods to customers. In performing its analysis, the Group identified arrangements where there is a change in the agent/principal classification. The impact to revenue and cost of sales for the 52 weeks to 10 March 2018 is a £7 million reduction. This is immaterial to the Group results and has not been restated within the comparatives within the profit and loss statement.
IFRS 16 ‘Leases’
IFRS 16 ‘Leases’ was issued in January 2016 and introduces a comprehensive model for the identification of lease arrangements and accounting treatments for both lessors and lessees and will supersede the current lease guidance including IAS 17 Leases and the related interpretations. The standard is effective for annual periods beginning on or after 1 January 2019 and will be adopted by Sainsbury’s for the financial year commencing 10 March 2019.
IFRS 16 distinguishes leases and service contracts on the basis of whether an identified asset is controlled by a customer. The current distinction of operating leases (off balance sheet) and finance leases (on balance sheet) are removed for lessee accounting and is replaced by a model where a right-of-use asset and a corresponding liability have to be recognised for all leases by lessees (i.e. all on balance sheet) except for short-term leases and leases of low value assets.
The standard represents a significant change in the accounting and reporting of leases, impacting the income statement and balance sheet as well as statutory and Alternative Performance Measures used by the Group.
The Group has chosen to adopt the fully retrospective approach to transition. The comparatives in the consolidated financial statements for the 52 weeks ending 7 March 2020 will be restated as if IFRS 16 had always applied. The first reporting under IFRS 16 (with restated comparatives) will be for the Group’s interim results as at 21 September 2019.
The Group has performed an extensive review of all the Group’s leasing arrangements in light of the new accounting standard. The work is nearing completion and the Group estimates that, had IFRS 16 been applied in the 52 weeks ended 10 March 2018, the impact on the consolidated balance sheet as at 10 March 2018 would have been:
· Recognition of a right-of-use asset in the region of £5.1 billion disclosed within non-current assets
· The recognition of a corresponding lease liability in the region of £5.9 billion
· Derecognition of other balance sheet items, including onerous leases, rent free accruals and fair value adjustments relating to acquired leases of around £0.1 billion
·

MCT: Tuesday, April 30, 2019

Found Object
ELMA MAISACK
Dec 6, 1918 – April 16, 2019 Elma Viola Maisack (Manninen) 100, passed away peacefully April 16, 2019. Elma was born in Fort Bragg. At the age of three her father Kalle and mother Anna along with the rest of her family moved to Finland. Elma graduated nursing school and volunteered as a Lotta, a nurse that helped wounded soldiers during WWII. After the war Elma came back to California and married Wallace E. Maisack and continued working for the Red Cross as a Licensed Vocational Nurse. Elma was known for her warm friendly smile and loved her family, friends and the people around her. Elma enjoyed being outdoors and with nature. The hobbies she enjoyed were gardening, especially cymbidiums and roses. Elma enjoyed watching sporting events and was extremely proud when she knew the athlete was of Finnish decent, whether it was a formula car race or a hockey game. Elma was a big Dodger baseball fan. Elma is survived by her two sons, Gary and Craig. Pastor Jarmo Tarkki will conduct funeral service on April 30, 2019 at 12:00 pm at Inglewood Park Cemetery, 720 E. Florence Avenue, Inglewood, CA 90301.
LIVE AT THE BOONVILLE SENIOR CENTER!
Meatloaf and music at senior lunch on Thursday, May 2. Bootjack 5 (Dean Titus, Chris Rossi, Susan Clark, Rod Dewitt & Sue Marcott) will be performing during lunchtime. Soups on at 12 sharp!
ANDERSON VALLEY VILLAGE Upcoming Events
Tuesday May 7, 2pm: Tech Support, AV Senior Center.
Friday May 10, 11am: Volunteer Training, Lauren’s Restaurant.
Sunday May 12, 4pm: Monthly Sunday House Party, Lauren’s Restaurant.
MENDOCINO SPRING POETRY CELEBRATION
SUNDAY MAY 12
Whitman says, “Great poetry requires great audiences.” The public is welcome to celebrate the lively word on Sunday May 12, at the Hill House Inn of Mendocino, for the 15th consecutive revival of the Mendocino Spring Poetry Celebration. This event draws 30-40 of the best poets and work from the north counties and beyond.
There will be two open readings. Sign up at noon for the reading at 1:00 pm; sign up at 5:00 for the reading at 6:00 pm. Prepare four minutes for each session.
All poems will be considered for broadcast by Dan Roberts on KZYX&Z.
Choice comestibles and fellowship, open book displays. No charge, contributions welcome.
For info: Gordon Black at gblack@mcn.org or (707) 937-4107.
NIGHT LIGHT OF THE NORTH COAST: CAVE FIRE DANCER
by David Wilson
Photographing a fire dancer this week was a new experience for me, and I was unsure how things would turn out when Chelsea Burns, a local fire dancer, approached me about taking pictures of her as she danced with fire. It sounded like something interesting to photograph in the dark, so I was into it. My imagination began to conjure images, seeing shapes and designs and scenes that we could make.
We chose a beach location for its fire safety and potential for reflections. I was interested in capturing images inside a nearby cave, and there were other large rocks and rock faces with great textures that could be brought out by the fire’s illumination.
But as I photographed while dusk slipped to night I began to realize that capturing my vision of the fire dancer was going to take more experimenting than I had thought. Usually the fastest things moving about in my images are stars or clouds sliding across the sky, and bright light sources are held to a minimum. In contrast, the fire dancer’s twirling fire was a veritable cyclone of whirling light in constant blinding motion. It took a few frames to get used to that, and to be sure I am still not its master after photographing for only about an hour.
Looking through the photographs at home I couldn’t find any that I felt excited about. I needed more time to get used to the way the moving fire landed in the image in order to really capture what I was envisioning, but I see how it will be possible in future sessions. While I could find no single exposure that I thought stood on its own merits, I did find a number of them that I could put together into a fantasy environment. So I did.
A lot of the images I share are single exposures, but some are made from multiple separate photographs. The image I’m sharing here is a representation of that evening of fire dancing and photography made from a number of images from the shoot. I took about forty-five photographs, some out in low water that produced bright reflections, others near enough to the rocks that the fire brought out their details of texture and form, and some I shot within the cave, where the spinning flames illuminated the walls and floor of the cavern.
This image comprises a dozen photographs I took in and around the Moonstone Beach cave on April 24, 2019, and then later put together to make this scene of the fire dancer spinning in the cave. From within myself, this image comes out to you through my imagination, for the scene here never existed as you see it, but only as I saw it in my mind’s eye… though some people may recognize elements of the Moonstone Beach cave. Shapes of the mind. Sometimes inner peace is only a surface illusion we cloak ourselves in to hide what’s really within. But if we hide it too well, would we lose ourselves? What do you find if you lose yourself in this image? Fire Dancer: Chelsea Burns. Humboldt County, California.
(To keep abreast of David Wilson’s most current photography or peer into its past, visit and contact him at his website mindscapefx.com or follow him on Instagram at @david_wilson_mfx)
THE TRIALS AND TRIBULATIONS OF JEWEL DYER
Today’s theme is Gaps. Unfortunately, since I’ve never gamed in my life or called a fake Swat raid to shoot an unarmed man to death, the Gaps I’m dealing with is Low Gap Jail or otherwise the Gaps now dividing my hard earned and once seamless face into mobile segments of leather after I took a couple of showers here. Armored skin, a trait harnessed by ancestors for many a millennia. The body’s natural last-line of defense for coping with extreme climates and conditions evolved into in some cases modern beauty. I often catch myself double-taking in the mirror for the permanent shock of how disfigured my epidermal face is. I struggle to re-gather how just a shower ago my lush physique morphed into that of an E.T. extra-terrestrial with his well defined frown lines and bug eyes. Or maybe something akin to an Ephedrine Chef who never quite got the recipe right.
It’s not just showers I have to avoid. After my last morning shave within a couple of minutes of towelling the sinkwater from my face, crumbles of dandruff started falling non-stop. With that being said I now understand that every future shave will cause further face-warping and later bloodier damage, kind of like my feet which I couldn’t afford to lotion down after every shower due to budget restrictions, and which now look substantially different from the rest of my body.
I imagine a lot of the bridge bums around here grow beards just to hide these skin formations. Most of them have the signature forehead and hand wrinkles as well; you can almost identify this from the booking logs alone. What you won’t see is the trapped infections and gastric distress they come with. Various skeptics may be quick to proclaim that these are short and long term drug side effects, old age, or even stress. Which is my cue to remind everybody that these are instant chemical reactions and that they are welcome to come and document them first hand on my own body. I will also remind them that I’ve never been much of a drug user beyond popping cheap pills.
Unwarranted marijuana prosecutions are not the only source of my medical anomalies. My father wasn’t just an anti-vaxxer but seeing doctors or dentists was against his religion. A doctor visit was not going to happen unless I was bleeding or screaming in pain, like the time a deer tick burrowed into my ear and needed to be pried out by a Ukiah specialist. If I had a bad dental cavity I would have to whine about it several months until my baby teeth fell out. He was not going to drive anywhere if it was night time or as far as Ukiah.
This may come as a surprise but as a result of a tree climbing accident I have had a broken jaw since I was about 5 years old that often prevents healthy chewing and speech. Of course it got completely brushed to the side. Twenty years later a doctor saw it and all of a sudden prescribed opioids for it. He retired right before my follow-up appointment and it was odd the clinic ignored blackish metal fillings falling into my mouth but then refused to replace them, instantly transfixing the illusion of meth rot into whatever smile I could manage to crack open. To this day I still can’t fathom what type of patient would opt for black teeth.
Moving along, I bounced between a couple of careers for 4 years when I discovered retail. Smiling and greeting customers felt like therapy and I had lots of time between tasks to work out. I had my eyes set on college football. I then transferred to a Willits location to be closer to home. Thanks to actual friends I discovered the magic of EBT supplemental food income and the breathing room in my budget gave me hope that I could leave the nest. I was feeling poorly which turned out to be full blown pneumonia, so I started popping Howard Memorial’s new pills when I noticed 3 days later that my limbs were sore and cramping. Upon re-examining the label of the antibiotics the label stressed “No one should be going to work while taking this medication under any circumstances.” All I was doing was walking around like usual when all of a sudden my sorest leg made a ripping sensation from my ankle to my neck. I stopped taking the Cipro-LevaQuin immediately but the effects lingered.
I got fired for showing up to work for 2 weeks with a bad limp, I couldn’t work out anymore, both of my ears went severely mute one day, my car got impounded, I fell and broke my spine likely as a result from weakened tendons not being able to support my bones. If that wasn’t enough, I started getting in a lot of fights. It wasn’t long until I had a broken hand as well.
This is where things got strange. The next 5 years I literally spent limping into town for easily hundreds of medical check-ups and being juggled between Howard Hospital, Little Lake Health Clinic, Baechtel Creek Clinic, Willits Physical Therapy and, later, Mendocino County Jail and Napa State Hospital with absolutely zero progress and being told that my bloody green cough was my imagination, my ingrown toenails didn’t exist, my spinal x-ray does not exist and that since I was at the mercy of rural hitchhiking and missed an appointment that they were booked the rest of the year because they heard rumors that I got fired for showing up to work late.
I ended up in one of my dad’s guest shacks because he was getting crazier and telling me that chemtrails were coming out of cracks in the ground and making him sick but that he himself was not going to seek medical help. He started randomly calling the police on me and making claims that I was stealing and breaking things but never being specific about which items. It didn’t matter to Willits PD because when they saw my house where I had been urinating in bottles and dumping them down the drain, had a bed thrown smack dab in the middle of the room for easy access, sleeping bags piled high, and dirty clothes thrown everywhere from a washer malfunction, I immediately was considered some homeless wrongdoer, even if he admitted later he was wrong and sorry.
Everywhere I went, people were telling me I was lying; it was obvious that no one wanted to take responsibility for my adverse reaction to antibiotics, let alone supply me with legal pain meds. I was desperate and willingly shelled out the last $60 I had to my name left from my working life, but the 1000 mg doses of magnesium seemed all of a sudden to make my extreme tendonitis go away over 2 weeks. My spine still hurt and I couldn’t workout but I needed alternative sources of income so I had the gall to resort to the herbal green medicine trade. I figured everyone was doing it. My mom and dad’s sides probably had 60 years combined experience doing it in this county. My dad even used to crudely circumvent the licensing laws by forging the same certificate year after year at the same Willits copy shop. Next thing I know the FBI is flash banging my ear drums out. “You were at the wrong place at the wrong time,” they tell me sympathetically.
(Ed Note: Mr. Dyer has been on judicial hold for several years on charges that he beat his father to death with an aluminum baseball bat. He goes on to complain at length about persecution by different branches of authority.)
…My charges may look bad on their face, but even if for some reason someone was to feel I wasn’t ever in any actual danger from a knife-wielding lunatic, who in 2009 had to be tasered by 3 deputies for public intoxication on his own property, one still needs to take into account that I saved 2 lives during my involuntary detention at Napa State Hospital violent wing. One, a nurse who got her face broken by a Stockton inmate and, two, a 60-year-old man who had a stroke. Both were unattended in pools of their own blood!
It’s been a long journey. When I left high school I had over eleven dental fillings that needed to be caught up on. Maybe I was somewhat of a wild kid and refused to brush my teeth or clip my fingernails in retaliation for no shower access. Nevertheless, I mostly turned to apples and oranges and somehow left high school with a reformed diet, track and field accolades, and as a Navy Seal prospect who could darkhorse all of the swimming prerequisites from my summers spent bathing in the creek. It wasn’t a big deal, though. When the Navy recruiters in Ukiah told me they couldn’t give me rides to meetings I moved to Angels Camp and let my aunt overwork me 7 days a week for her landscaping company. Over a period of 2 or so years I was only allowed to get a fraction of my dental work done. I was popping 6 ibuprofens a day to deal with the cavities and I couldn’t afford my needed root canal. Citations incurred while driving my aunt’s jerryrigged trucks would come out of my dining budget instead of me being sat down and taught to contest them in court — a little odd considering she is a second generation lawyer who tries to hide her law pedigree to assume the role of boss that does her own manual labor. She also ended up assaulting me a couple of times on the job, always for things I had no control over and she ended up pocketing 3 racks of money I saved all summer.
So I sneak out one night to some facebook party down the hill in Lodi, California. When I got back to work the next day I realized I was one of a hundred or so people who caught 3-week fevers and lung infections. I then get tricked into finishing my tooth fillings at Western Dental Livermore where they sneak 6 or so massive… (Jewel’s story tails off here.)
Background (October 2016):
LONGVALE FATHER MURDERED; SON IN CUSTODY
By Linda Williams, Willits News
A family altercation escalated early Monday morning ending with the father, Sanford Joel Sternick, 58, dead and his son Jewel Evern Dyer, 25, in custody for murder.
In a press release Mendocino County Sheriff’s Lt. Shannon Barney says according to a witness, Sternick and Dyer were arguing when Dyer allegedly struck Sternick in the head with a baseball bat, killing him.
Mendocino County Sheriff’s deputies were called to the residence on the 35500 block of North Highway 101 at 3:30 a.m. on March 28 and took Dyer into custody. Sternick was pronounced dead at the scene with obvious blunt force trauma to his head.
Dyer is being held in Mendocino County Jail on $500,000 bail. An autopsy has been scheduled and the case is expected to be presented shortly to the district attorney’s office.
Dyer was arrested in the Covelo area on Oct. 29, 2014 on suspicion of cultivation and possession of marijuana for sale and being armed with a firearm in the commission of a felony.
From the Mendocino County Sheriff’s Office:
On 3-28-2016 around 03:30 AM the Mendocino County Sheriff’s Office was dispatched to a reported altercation between a father and son that resulted in the death of Sanford Sternick. Sternick was 58 years of age.
MCSO Deputies responded to the location where they located and confirmed the death of Sternick from what appeared to be blunt force trauma. The decedent’s son, Jewel Dyer, 25 years of age, was detained at the scene.
The Sheriff’s Detective Unit was called to the scene to conduct an investigation into Sternick’s death. A witness indicated Dyer claimed there was an argument in the early morning hours between he and his father. That argument lead to a physical altercation, which resulted in the father suffering blunt force trauma about the head. A baseball bat, located at the crime scene, was believed to have been used during the altercation.
Dyer was transported and booked into the County Jail where his bail will be set at $500,000. An autopsy is being scheduled and the case will be presented to the District Attorney’s Office for review.
Anyone with information related to this case is requested to contact the Mendocino County Sheriff’s Detectives Unit or by contacting the tip line at (707)234-2100.
Dyer was previously arrested on Oct 29, 2014 for pot growing, pot possession for sale, and armed with firearm.
Sternick quarreled with his son, Jewel Evern Dyer, during the wee hours of 28 March 2016. At about 3:30 AM, the Mendocino County Sheriff’s Office was called to the 35500 block of CA Highway 101 in Laytonville. Responding deputies found 58-year-old Sanford Sternick dead from blunt force injuries to his head. A witness implicated the 25 year old son in his father’s murder; the blunt instrument wielded by him was his baseball bat. Investigation revealed that Clayton Sternick and Jewel Dyer were living at their father’s place to care for him, as he was developing dementia. In-home Supportive Services was paying for this elder care. Additionally, the three men were preparing the ground for an illegal marijuana growing operation. Dyer and his father were quarreling about the work involved in installing an irrigation system. According to Dyer, his father menaced him with a machete. Dyer then purportedly defended himself with a baseball bat, though why he smashed his father’s head both front and rear goes unexplained, as do the defensive wounds to dad’s arms. During Dyer’s preliminary examination, his brother Clayton Sternick said Dyer had come to Clayton’s cabin about 3:30 AM and said, “I’ve killed Pops, dude, the stress is over, we can relax now.” Dyer was overheard telling his public defender that the prelim was a waste of time. Dyer was bound over for trial. (— Bruce McEwen, 2016)
ANDERSON VALLEY MARKET’S spiffy new coffee bar, located to the rear of the store, and presided over by the unfailingly charming Kim Bloyd the day I visited, is a true work of art rendered by owner JJ (Jennifer) Thomasson’s talented husband, Jeff Schlafer. JJ and Jeff also own Valley Woodwork based in Redwood Valley, and if you’re interested in truly fine woodwork you won’t go wrong with Jeff, whose skills are on full display at the market’s new coffee bar.
THE DISCO RANCH WINEBAR and Wineshop is now open in Boonville in the old Aquarelle space. Stop in for some nibbles and wine on the terrace or take a bottle or two home to share with friends and family. Come in and ask owner Wendy Lamer what the story is on the “Disco Ranch”! Welcome to the Valley Wendy! Open Thursday-Monday 10:30-6:30pm or whenever the last one leaves at night. Next Friday, May 3rd, the AV Farmer’s Market is in the Ranch parking lot, 4-7pm. Boonville Road winery will be pouring wine that evening!
THE BEER BRIGADES arrived in Boonville by the several thousands Friday and Saturday, downed unholy amounts of beer, and were gone by Sunday evening, not so much as a discarded Bud can or a drunken dude in or near the Boonville Fairgrounds, ground zero for the event. And no arrests, according to the weekend County Jail booking logs, which has got to be a record given the number of drinkers.
SF CHRONICLE UPDATES SHEPARD FAMILY FIRE TRAGEDY
A fire’s unfathomable toll: How a California wildfire changed everything for one family
https://projects.sfchronicle.com/2019/redwood-fire-victims/
JUST ANOTHER LOVE STORY
On April 28, 2019 at 2:09 AM a Deputy with the Mendocino County Sheriff’s Office was dispatched to a possible domestic violence incident in the 100 block of West Lake Mendocino Drive in Ukiah, California. Upon arrival the Deputy learned Brian Gard, 33, of Lakeport, and an adult female were traveling in a vehicle northbound on Highway 101 near Ukiah.
The couple became involved in an argument and the adult female requested Gard stop the vehicle and let her exit so she could have a relative pick her up. Gard drove the vehicle to a gas station at the 100 block of West Lake Mendocino Drive and parked the car. Gard then threatened to kill the adult female if she exited the vehicle, causing her to called 911 to report the incident. Deputies learned Gard and the adult female were in a cohabitant dating relationship. Deputies subsequently arrested Gard for criminal threats and he was booked into the Mendocino County Jail where he was to be held in lieu of $20,000 bail.
BACK DOOR COLTER
On 04-27-2019 at approximately 11:28 PM a Mendocino County Sheriff’s Deputy observed a vehicle being driven recklessly at about the 76000 block of Highway 162 in Covelo. The Deputy conducted a traffic enforcement stop and the driver, Colter Reynolds, 38, of Covelo, eventually stopped his vehicle in front of a residence in the 76000 block of Main Street.
Reynolds exited the vehicle and quickly started walking toward the residence. The Deputy told Reynolds to stop, however Reynolds defiantly kept walking and entered the residence and shut the door. The Deputy forced entry into the residence in pursuit of Reynolds who ran out the back of the residence and threw a wooden piece of the back door at the pursuing Deputy striking the Deputy in the legs. The Deputy did not sustain any injuries from the assault. The Deputy pursued Reynolds out the back door of the residence and was able to catch him and place him under arrest. During a search incident to arrest, the Deputy located a baggie of suspected cocaine in Reynolds clothing. Reynolds was booked into the Mendocino County Jail on charges of Possession of Controlled Substance and Felony Resisting or Threatening Officer where he was to be held in lieu of $15,000 bail.
FROM SHEEP TO SWEATER AT BARN TO YARN
Just where did the wool for your sweater come from? How do you shear the wool from a wriggling 160lb sheep? You can learn the answers to these questions and gain hands on experience of knitting, weaving, spinning and felting at “Barn to Yarn” this Saturday from 9AM-3PM at the University of California (UC) Hopland Research and Extension Center (HREC).
Experts from far and near join the event to share their knowledge and love of wool and all the associated crafts. Mendocino Wool and Fiber Inc. owners, Matt and Sarah Gilbert, will share their skills from shearing to classing the wool. Spinners from the Silverado Spinsters in Davis will spin and weave a shawl to be auctioned off at the end of the day. Matthew Topsfield of the Uist Yarn Studio travels all the way from the Scottish islands to teach the art of making ‘Dorset buttons’ and the knitting traditions of sea faring communities, and Robin Lynde of Meridian Jacobs in Vacaville joins with her beautiful wool and stories of her farm and fiber.
“There’s so much for families, crafters and fiber enthusiasts at Barn to Yarn,” commented Hannah Bird, HREC Community Educator. “My favorite aspect of this event is the fact that everyone gets the chance to try their hand at working with wool, we’ve had children spinning and knitting every year and expert fiber artists learning from our mini workshops. We’re honored to have special guest and centenarian, Jean Near, joining us, whose gorgeous Merino wool is regularly a prize winner at the Mendocino County Fair. We’re also thrilled this year to be recipients of a grant from the Mendocino Community Foundation, Textile and Fiber Arts Endowment Fund to support the event,” added Bird.
This event heralds the beginning of the annual Hopland Shearing School run by the UC Mendocino County Cooperative Extension. The week long training is so desired that the 25 places sell out in minutes from the opening of registration. Many of the participants work with smaller sheep flocks and it is not economical to employ travelling shearers, used to shearing flocks of hundreds or thousands, for just a few sheep. These small flocks are increasing across Mendocino County and the need for qualified shearers who are sympathetic to the needs of small producers is high.
Alongside a renewed interest in keeping small flocks of sheep, there has also been increased practice of fiber arts such as knitting and felting in the last 20 years, particularly amongst millennials.
Admission is $15 for adults, children under 12, free. HREC asks visitors to leave their pets at home to protect the site and the sheep resident there. Bring your own picnic and all utensils; tea, coffee and water will be available. Visit http://bit.ly/BarntoYarn2019 to find out more and purchase your ticket. Barn to Yarn will be held at the Rod Shippey Hall, 4070 University Road, Hopland, CA 95449 from 9am-3pm on May 4th. For more information contact Hannah Bird, (707) 744-1424, Ext. 105, hbird@ucanr.edu.
Barn to Yarn
UC Hopland Research and Extension Center
Rod Shippey Hall, University Road, Hopland
$15 for adults, FREE children under 16
Register online at: http://bit.ly/BarntoYarn2019
Follow the journey from shearing to spinning wheel to sweater:
Watch shearing demonstrations
Get a taste of spinning, dyeing and wool classification with our experts
Pick up your needles and get knitting!
Kids can make and take home wool crafting projects
Bring a picnic to enjoy
No animals – Except service animals that are specifically trained to aid a disabled person.
Visit www.hrec.ucanr.edu for more details or call Hannah Bird (707) 744-1424 ext. 105 e-mail: hbird@ucanr.edu
COLVIG BACK ON THE JOB, a weasel-lipped presser from Colvig’s boss, Superintendent Westerburg of the Willits School District, annotated by us as a clarifying service:
“I am very pleased (why?) to announce there has been a resolution on the court case involving Principal Colvig. Based on his cooperation, character (?), and evidence provided (unearthed by DA investigator Andy Alvarado, not you, Westerburg) the district attorney has offered Mr. Colvig a deferred judgement. This means essentially that during the next two years that Principal Colvig needs to not have an issue (another failure to report that one of his son’s sexually mauled a classmate) of this nature and provide support to local districts on how to handle difficult situation like he was faced with. (How to keep your job even though you’ve committed a serious offense.) I appreciate (Why? You also failed to do your job) Mr. Colvig’s willingness (he got a great deal, of course) to accept this offer and put this situation behind us (Us?) without a court case which would involve staff and students and create a great deal of media hype. (The facts are hype?)
This is one of the most complex issues that I have deal with in my long career. (As a featherbedding time server) I look forward to Mr. Colvig being back to work as our principal. WUSD was very careful to not take sides (there was only one side on this one) and waited for the court system to work through the process. (Bullshit. You tried to cover it up until you were caught) During this process the district completed an investigation and am completely confident with my decision to get him back in the office and leading WHS. Mark Westerburg, Superintendent, Willits Unified School District
FROM THE ARCHIVE: MICHAEL COLVIG is the principal at Willits High School, one of a bunch of Colvigs clustered at the Gateway to the Redwood Empire. Michael Colvig’s father sits on the Willits School Board, a school board like any other, meaning fully capable, and sometimes blithely willing, to commit their own crimes and misdemeanors. So when little Colvig, Colvig the Third we might call him, sexually assaulted a classmate at an off-campus party, the senior Colvigs, pillars of the Willits educational effort, had themselves a dilemma. Should little Colvig’s crude and apparently drunken attempt on his classmate be reported to the Willits Police as the law requires? Colvig the principal decided to handle the matter in-house, his own house, not report it as he’s supposed to. Colvig
AND HERE HE IS, Michael Colvig, the first school official in Mendocino County’s history booked into the County Jail for failure to protect a student. Judging from his mug shot he doesn’t look especially anguished, but then a lot of these school people look kinda unevolved, kinda… In the meantime, the sexual criminal Colvig, Colvig the Third, has left school early to join the Air Force. We hope the already forgotten victim in this case is pursuing a claim against Willits Unified and the fatheads who run it.
COMING SOON, POLIO: There have been 704 cases of measles reported in the first four months of 2019 alone—which is more cases than in any full year since 1994, according to CDC data cited Monday by NBC News. At least 22 states have at least one reported case, and outbreaks continue to rage in areas like New York City’s orthodox communities, largely fueled by anti-vaccine sentiment. It doesn’t look like it will stop anytime soon: Just a week ago, a new outbreak cropped up in Los Angeles, and efforts to contain the disease have been largely unsuccessful. Meanwhile anti vaxxers continue to mobilize agains vaccination. Here in Mendocino County, it almost goes without saying given the credulity level among the neo-hippie sectors of the population, there are enough anti-vaxxers to ensure an outbreak of measles.
BALO VINEYARD/Winery, Philo, has been bought by Healdsburg winemaker Wells Guthrie who once owned Copain Wines (now owned by Kendall-Jackson). Balo was owned by Tim Mullins who also recently sold the Live Oak Building to Anne Fashauer. The asking price for Balo was $4.7 million. Wells Guthrie
SPRAYING, AN ON-LINE EXCHANGE
This guy was in a spacesuit doing some spraying, a contrast of the disconcerting and relaxing. If it’s that poisonous should it really be going into my wine? (Frank Hartzell)
George Hollister: Frank Hartzell needs to know what is being sprayed on grapes, before making assumptions. What he likely saw was sulfur spraying for fungus control. Elemental sulfur has been used to control fungus in agriculture for the last two thousand years.
Bruce Anderson: Most vineyards, George, as I’m sure you know, also spray literal tons of pesticides and herbicides on their dubious product.
George Hollister: If you see someone broadcast spraying, in April, in a vineyard, with a tractor it is most likely sulfur. Sulfur is a fungicide, which is a pesticide. Is sulfur completely harmless? Of course not. Personally, I would not want to be soaked in it, or have to breathe the mist near the spray nozzle. Few would, that is why people wear protection when using it. That said, sulfur is not a mystery because of its 2,000+ years of use. And sulfur is not associated with significant long term side effects. Organic growers and conventional use it. The methods of application have changed. The ancient Greeks didn’t use Kabota tractors to farm their crops, but they still used elemental sulfur to protect those crops from fungal pests.
Mark Scaramella: “Most likely”? Not likely.
(from the California Department of Pesticide Regulation)
WINE GRAPE
There are four major wine grape production regions: North Coast (Lake, Mendocino, Napa, Sonoma, and Solano counties); Central Coast (Alameda, Monterey, San Luis Obispo, Santa Barbara, San Benito, Santa Cruz, and Santa Clara counties); northern San Joaquin Valley (San Joaquin, Calaveras, Amador, Sacramento, Merced, Stanislaus, and Yolo counties); and southern San Joaquin Valley (Fresno, Kings, Tulare, Kern, and Madera counties). Pest and disease pressure may differ among these regions. The pooled figures in this report may not reflect differences in pesticide use patterns between production regions.
Changes in pesticide use on wine grape are influenced by a number of factors, including weather, topography, pest pressure, evolution of resistance, competition from newer pesticide products, commodity prices, application restrictions, efforts by growers to reduce costs, and increased emphasis on sustainable farming.
The total amount of pesticides applied and the cumulative area treated in 2016 decreased. The area treated with sulfur and herbicides decreased, and the area treated with fungicides and insecticides increased in 2016. The long term trend over the last two decades is an increasing area treated for all pesticide types except for sulfur which has tended to fluctuate more annually.
Vine mealybug continued to be a concern for growers. It has now been found throughout most of the grape growing regions of California. The warm winters since 2012 have allowed vine mealybug populations to build up early in the season. In the North Coast region, the Virginia creeper leafhopper, a recent pest, continued to cause substantial damage in some locations, as did the western grape leafhopper. While there is effective biological control for western grape leafhopper, Virginia creeper leafhopper infestations require insecticide applications. In this region, these leafhoppers have generally been treated with organic materials (botanical pyrethrins and oils) as well as imidacloprid.
BACKGROUND: Mendo Glyphosate Roundup (April 12, 2017)
CATCH OF THE DAY, April 29, 2019 Asfour, Bazor, Bradley
FERAS ASFOUR, Ukiah. Domestic abuse, probation revocation.
JEREMIE BAZOR, Redwood Valley. Domestic battery, probation revocation.
VADE BRADLEY, Little River. Trespassing, battery on peace officer, resisting. Galindo, LaForce, Morris
THOMAS GALINDO, Ukiah. Disorderly conduct-alcohol.
JAMES LAFORCE, Ukiah. Stolen property, false ID.
DENA MORRIS, Ukiah. Parole violation. (Frequent flyer.)
TOM PETTY WAS RIGHT
by James Kunstler
How to account for Americans being the most anxious, fearful, and stressed-out people among the supposedly advanced nations? Do we not live in the world’s greatest democratic utopia where dreams come true?
What if the dreaming part is actually driving us insane? What if we have engineered a society in which fantasy has so grotesquely over-run reality that coping with daily life is nearly impossible. What if an existence mediated by pixel screens large and small presents a virtual world more compelling than the real world and turns out to be a kind of contagious avoidance behavior — until reality is so fugitive that we can barely discern its colors and outlines beyond the screens?
You end up in a virtual world of advertising and agit-prop where manipulation is the primary driver of human activity. That is, a world where the idea of personal liberty (including any act of free thought) becomes a philosophical sick joke, whether you believe in the possibility of free will or not. You get a land full of college kids trained to think that coercion of others is the highest-and-best use of their time on earth — and that it represents “inclusion.” You get a news industry that makes its own reality, churning out narratives (i.e. constructed psychodramas) to excite numbed minds. You get politics that play out like a Deputy Dawg cartoon. You get a corporate tyranny of racketeering that herds spellbound citizens like so many sheep into chutes for shearing, not only of their money, but their autonomy, dignity, and finally their will to live.
Can a people recover from such an excursion into unreality? The USA’s sojourn into an alternative universe of the mind accelerated sharply after Wall Street nearly detonated the global financial system in 2008. That debacle was only one manifestation of an array of accumulating threats to the postmodern order, including the burdens of empire, onerous global debt, population overshoot, fracturing globalism, worries about energy, disruptive technologies, ecological havoc, and the specter of climate change — things that hurt to think about.
The sense of gathering crisis persists. It is systemic and existential. It calls into question our ability to carry on “normal” life much farther into this century, and all the anxiety that attends it is so hard for the public to process that a dismaying number of citizens opt for suicide. There is no coherent consensus about what is happening and no coherent proposals to do anything about it. Bad ideas flourish in this nutrient medium of unresolved crisis. Lately, they dominate the scene on every side.
A species of wishful thinking that resembles a primitive cargo cult grips the technocratic class, awaiting magical rescue remedies to extend the regime of Happy Motoring, consumerism, and suburbia that make up the crumbling armature of “normal” life in the USA. The political Right seeks to Make America Great Again, as though we might return to a 1962 heyday of industrial mass production by wishing hard enough. The Left seeks the equivalent of an extended childhood for all, lived out in a universal safe space, where all goods and services come magically free from a kindly parent-like government, and the sunny days are spent training unicorns to find rainbows.
The decade-long “recovery” from the Great Financial Crisis of 2008 amounted to ten years of fake-it-til-you-make-it — with the prospect nil of actually making it to something like economic and cultural soundness. Are we too far gone now? Some kind of shock therapy is surely in the offing, and probably in the form of a violent financial readjustment that will alter the terms of getting and spending so drastically as to topple the matrix of rackets that masquerades as the nation’s business.
That financial shock has been coiling and coiling in the fantasyland that banking has become in the new zero interest rate regime where notions that pretend to be money get levered into new ways of destroying life on earth and the human project with it. At some cognitive level the people of this land sense what is coming and the wait for it is driving them crazy. Tom Petty was right: the waiting is the hardest part, and a hard way to learn that a virtual life is not an adequate substitute for an authentic one.
(Support Kunstler’s writing by visiting his Patreon Page .)
BOEING MISMANAGERS FORFEIT YOUR PAY AND RESIGN: An Open Letter to Boeing CEO Dennis Muilenburg
by Ralph Nader

Marie Kondo Effect hits the Great White North » strategy

Home » Branding , Design+Packaging , Fashion+Clothing , Featured , Health+Beauty , Retail » The Marie Kondo Effect hits the Great White North A flock of retailers from Asia have opened stores in Canada in a bid to cash in on the demand for minimalist aesthetics. 18 hours ago
This story originally appeared in the May 2019 issue of strategy.
Look left or right in any big Canadian city, and you’re likely to notice the bevy of brands from Asia that have set up shop here in recent years.
First, it was Japanese retailers, such Muji and Uniqlo, now it’s Korea’s VDL Cosmetics and Thailand’s Lemongrass House.
Perhaps we can blame (or thank, depending on your perspective) Japanese organizing consultant and author Marie Kondo for North America’s desire for the minimalist aesthetic that Asian retailers bring to the masses. Kondo’s paean to minimalism, The Life-Changing Magic of Tidying Up , was first published in Japan in 2011, then hit North America in 2014. Kondo, and her stylishly spare look, enjoyed a second-coming when her Netflix series, Tidying Up with Marie Kondo , hit screens earlier this year.
Canadians also love a good value proposition, says Jason Dubroy, VP managing director of TracyLocke. “We live in a discount culture right now, so affordability is kind of a hallmark of most Asian retailers coming to Canada.” That could be a driver behind the arrival of a slew of discount retailers from the East, including Miniso, Mumuso and Ximivogue.
Our desire for discount retail, particularly Japanese, is so ravenous that the chain doesn’t even have to actually be from Japan.
Oomomo, for example, opened in Toronto in late 2018 as a “Japanese-inspired” dollar store. Despite its Vancouver origins, some still erroneously dub the retailer (which has five stores in Canada so far) as being “Japan’s version of Dollarama.”
And while these discount retailers have garnered tons of press and plenty of excitement in the Great White North, not all of it has been positive. Miniso’s Canadian division, for one, recently narrowly avoided bankruptcy. The Kondo effect and love of deals may have sparked an interest in the East among Westerners, but Dubroy says having a large diaspora is what could be attracting Asian brands here. In fact, the majority (61.8%) of newcomers here in 2016 were born in Asia, according to Statistics Canada.
There’s also the fact that the collapse of big American retailers like Sears and Target has literally and figuratively left holes in malls across Canada. And the retrenchment of U.S. brands, such as the Gap and J. Crew, also mean there’s room for new retailers.
All of these factors combined have created the perfect storm for Eastern retailers thriving in the West, say retail analysts. Here’s a look at some of the Asian-born brands that are creating a new retail battleground.
Muji Retail analyst Bruce Winder calls Muji “a latter-day Gap – an updated, interesting Gap.” The affordable brand sells similar items to the Gap, such as French terry hoodies. But, the Japan-born brand also hawks home items like aroma diffusers (which are the most popular item in its Toronto flagship store), furniture, bedding and embroidery services. The brand opened its first store in Tokyo in 1983, and finally opened a Canadian store in Toronto in late 2014. It has 419 stores in Japan, 15 in the U.S. and six in Canada so far. The retailer adds local touches in its Canadian stores, serving up everything from totes with a line drawing of the CN Tower on them to coffee from local roaster, De Mello Palheta.
Uniqlo Popular fast-fashion brand Uniqlo has built a devoted following since its first store opened in Hiroshima, Japan, back in 1984. Like its global rivals, such as Sweden’s H&M, Uniqlo has warehouse-like stores stuffed with affordable wardrobe staples. The minimalist clothing brand has more than 2,000 stores worldwide and opened its first Canadian location in 2016 at Toronto’s Eaton Centre. Today, Uniqlo has 11 Canadian locations, from Surrey, B.C., to its newest Newmarket, Ont., outpost. The retailer’s low prices appeal to Canadians, but its strong design and quality fabrics is what makes Uniqlo truly stand out, says Dubroy. The brand has also made an effort to celebrate Canadian culture: its “Welcome Store” pop-up shop by Rethink offered Canadians the chance to keep a flannel shirt or leave it for a new immigrant.
VDL Cosmetics Among the fashion set, Korean beauty (a.k.a. K-Beauty) and skincare brands have achieved cult status in recent years. Seoul-based VDL Cosmetics was only founded in 2012, but since then it has become globally known for helping people achieve what it dubs that “glass skin glow.” VDL, which stands for Vivid Dreams come to Life, opened its first North American store in the form of a flagship on Toronto’s trendy Queen St. W. shopping strip last summer. It also opened a pop-up at the Toronto Eaton Centre in April, in support of its five-year partnership with Pantone, which includes a collection of products inspired by Pantone’s Colour of the Year, Living Coral.
Lemongrass House Canada Lemongrass House is known for its all-natural, handcrafted, artisan spa products and fragrances. The Thailand-based premium brand opened its first Canadian store on the West Coast in Vancouver’s well-heeled Gastown neighbourhood last summer. The airy shop is the first North American store for the retailer, which operates about 40 stores in 12 countries. Lemongrass House already enjoys brand awareness as its products are distributed in more than 30 countries via luxury hotels and spas, including Four Seasons Resorts. The Vancouver shop has hardwood floors and green walls echoing the colour of lemongrass, as well as the brand’s logo. Tags:

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