Sainsbury’s profits fall amid soaring grocery inflation

Sainsbury’s has revealed a fall in profit as the supermarket group absorbed some of the impact of rising costs.

Still, the retailer said it’s well positioned for the important holiday season after boosting trade last quarter.

Sainsbury’s, which also owns Argos, said its underlying pre-tax profit fell 8% to £340m in the six months to 17 September compared to the same period last year.

The company has announced that year-to-date profits will fall as it decides to invest more in its pricing and wage improvements for workers.

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Sainsbury’s chief executive Simon Roberts said he knew how difficult it was for customers (Dominic Lipinski/PA)

The retail group also revealed that total revenue for the half year rose 4.4% to £16.4 billion compared to the same period last year.

Like-for-like sales excluding fuel declined 0.8% for the six-month period after declining from pandemic-triggered numbers earlier in the period.

However, the group said it saw like-for-like sales rise 3.7% last quarter as its grocery business saw accelerating inflation and taking advantage of warm summer weather.

The group said it has benefited from investments to soak up cost inflation on key products and keep prices lower for customers, with £500m to be invested in pricing.

Sainsbury’s said it was “well positioned through the peak trading period and into the next financial year to help customers weather further pressure on the cost of living”.

The group is halfway through a £1.3billion cost-cutting program that has seen the closure of in-store restaurants and Argos standalone stores.

Under previously announced plans, about 50 Argos stores are set to close this year, with about 25 Argos locations opening in larger Sainsbury’s stores.

Simon Roberts, chief executive of Sainsbury’s, said: “We really know how tough it is for millions of households at the moment.

“Customers care about every penny and pound, and we know they rely on us to keep grocery prices as low as possible.”

https://www.belfasttelegraph.co.uk/news/uk/sainsburys-profits-fall-amid-soaring-grocery-inflation-42115349.html Sainsbury’s profits fall amid soaring grocery inflation

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