Sainsbury’s claims to raise prices at a slower pace than rivals

Sainsbury’s claims it is raising prices more slowly than its peers as the boss says it understands “how tough it is for millions of households”.

Chief Executive Simon Roberts said Sainsbury’s “has never offered better value for money” and said lower prices than its competitors have caused profits to fall by a third. But he said Sainsbury’s “has switched less to Aldi and Lidl than any other full-range supermarket”.

Sainsbury’s said it absorbed more of the higher costs itself, with pre-tax profit falling 29 per cent year-on-year to £376m for the six months to mid-September. Sainsbury’s retail margins fell to 2.95 percent in the last period, compared to 3.37 percent a year ago.

Mr Roberts said: “We really know how difficult it is for millions of households at the moment. Customers are looking at every penny and pound and we know they rely on us to keep food prices as low as possible.”

Despite the tightness among buyers, Sainsbury’s stood by its guidance and said it still expected pre-tax profits of between £630m and £690m as it posted strong trading momentum in recent weeks.

It comes as retailers enter their peak trading period around Christmas, with Sainsbury’s saying it’s not yet clear what gift-buying will look like this year. Mr Roberts said it was “the great unknown” for retailers.

Concerns have mounted in recent weeks that many could be hit by shoppers saving on higher household bills and more people flocking to cheaper stores, including discounters like Aldi or Lidl.

Sainsbury’s had warned earlier this year that pressure on shoppers would “only increase” as the year progressed, urging it to unveil a £500m plan aimed at keeping prices lower.

In Thursday’s results, Sainsbury’s said its grocery sales rose 0.2 percent in the first half to mid-September, buoyed by the summer heatwave. However, it reported a larger increase from its stations, with fuel sales up nearly 40 percent year-on-year, adding 4.4 percent to the group’s total revenue.

https://www.telegraph.co.uk/business/2022/11/03/sainsburys-claims-raise-prices-slower-pace-rivals/ Sainsbury’s claims to raise prices at a slower pace than rivals

Russell Falcon

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