Sainsbury’s boss warns UK living costs squeeze will ‘only intensify’

The pressure on households will “only intensify” through the rest of this year, the boss of Sainsbury’s has warned as he said the supermarket would invest £500m in attempting to keep prices low.

The pledge came as the UK’s second biggest supermarket, which also owns the Argos and Habitat chains, revealed that sales at established stores fell 4% in the 16 weeks to 25 June compared with the same period a year before and excluding fuel. The slide was led by an 11% fall in sales of general merchandise and a 10% drop in sales of clothing. Grocery sales fell 2.4% year-on-year but were up nearly 9% on pre-pandemic levels.

The figures emerged as shoppers switch to cheaper products, such as frozen and tinned foods and supermarket own label items, and set themselves tight budgets amid hefty grocery inflation and a squeeze on the cost of living from higher energy, petrol and housing costs.

Simon Roberts, the Sainsbury’s chief executive, said: “The pressure on household budgets will only intensify over the remainder of the year and I am very clear that doing the right thing for our customers and colleagues will remain at the very top of our agenda.”

He said shoppers were “watching every penny and every pound” but were also looking to Sainsbury’s for treats on special occasions.

“We really understand how hard it is for millions of households right now and that’s why we are investing £500m and doing everything we can to keep our prices low, especially on the products customers buy most often. We’re working hard to reduce costs right across the business so that we can keep investing in these areas that customers care most about,” Roberts said.

He said the improvements Sainsbury’s had made on value, quality, innovation and service had helped the retailer take a bigger share of the grocery market in volume terms.

Sainsbury’s said the sales fall was in line with expectations and it continued to expect to meet its target of making profits of between £630m and £690m in the year to March 2023.

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