Sainsbury's to cut capex and costs

London - British grocer Sainsbury's said it would rein in spending on new stores and find more cost savings to finance price cuts as it seeks to cope with the toughest market conditions for decades.

Announcing the results of a strategic review Sainsbury's maintained its interim dividend but said profitability would be lower in the second half than the first half.

Sainsbury's posted a profit before tax and one off items of £375m for the six months to September 27 - ahead of analysts' expectations of about £350m but down from £400mi in the same period last year.

It is paying an interim dividend of 5.0 pence.