More than 120,000 Sainsbury's staff will share a £60m bonus pot after profits rocketed to £543m.
The big payout - £13m more than last year - comes after the supermarket announced underlying profits had surged by 11.3% - more than Tesco and Morrisons.
The UK's third biggest supermarket, which is celebrating its 140th anniversary, said like-for-like sales rose 4.5%, excluding fuel, in the year to March 21.
Sainsbury's hailed its ability to appeal to "savvy" shoppers in the recession as it now sees more than 18 million customers pass through checkouts each week.
But chief executive Justin King told Sky News it had been a "very challenging period for the UK retail industry".
He suggested that the country could now be "bouncing along the bottom" in terms of the recession and appeared hopeful for recovery.
Today's profits came in slightly higher than the £526m expected in the market.
While the growth is less than half the 28% surge seen the previous year, it compares well with the 8.8% hike in annual profits seen at market leader Tesco and the 7% rise at Morrisons.
Sainsbury's has been stealing market share from Tesco as value-conscious consumers shop around for the best deal, with the latest TNS Worldpanel data showing Sainsbury's now accounts for 16.3% of the sector.
Its Jamie Oliver-led Feed Your Family For A Fiver campaign has been well received by shoppers, while sales of its basics range have soared - up more than 60% year on year in the final quarter.
Mr King said: "Our universal customer appeal and continued investment in price and quality have been fundamental to our growth, catering for a range of changing customer needs and trends.
"Over the past 12 months consumers have become increasingly 'savvy' and have responded to rises in the cost of living by making significant changes to the mix of products they buy.
"There's one or two companies doing well like us - it might be the that we (the economy) is bouncing along the bottom."
The group's product range has provided customers with the option to "change what they buy, rather than where they shop", he added.
The big payout - £13m more than last year - comes after the supermarket announced underlying profits had surged by 11.3% - more than Tesco and Morrisons.
The UK's third biggest supermarket, which is celebrating its 140th anniversary, said like-for-like sales rose 4.5%, excluding fuel, in the year to March 21.
Sainsbury's hailed its ability to appeal to "savvy" shoppers in the recession as it now sees more than 18 million customers pass through checkouts each week.
But chief executive Justin King told Sky News it had been a "very challenging period for the UK retail industry".
He suggested that the country could now be "bouncing along the bottom" in terms of the recession and appeared hopeful for recovery.
Today's profits came in slightly higher than the £526m expected in the market.
While the growth is less than half the 28% surge seen the previous year, it compares well with the 8.8% hike in annual profits seen at market leader Tesco and the 7% rise at Morrisons.
Sainsbury's has been stealing market share from Tesco as value-conscious consumers shop around for the best deal, with the latest TNS Worldpanel data showing Sainsbury's now accounts for 16.3% of the sector.
Its Jamie Oliver-led Feed Your Family For A Fiver campaign has been well received by shoppers, while sales of its basics range have soared - up more than 60% year on year in the final quarter.
Mr King said: "Our universal customer appeal and continued investment in price and quality have been fundamental to our growth, catering for a range of changing customer needs and trends.
"Over the past 12 months consumers have become increasingly 'savvy' and have responded to rises in the cost of living by making significant changes to the mix of products they buy.
"There's one or two companies doing well like us - it might be the that we (the economy) is bouncing along the bottom."
The group's product range has provided customers with the option to "change what they buy, rather than where they shop", he added.
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