Sainsbury’s sales decline over shoppers’ cost of living battle

Bloomberg

J Sainsbury Plc held its profit forecast for the full year even as it warned that rising inflation means pressure on household budgets will intensify.
Britain’s second-largest supermarket chain stuck to its forecast for the full year of underlying profit before tax of £630 million ($764 million) to £690 million. The grocer’s comparable sales, excluding fuel, fell 4% in the first quarter, according to a statement. This was better than analysts expected.
Sainsbury stock was up more than 1.5% in London. The supermarket said that normal shopping habits were resuming following the end of lockdowns even as consumers began to feel the pinch from rising inflation. Sainsbury, which controls about 15% of the UK grocery market and employs 189,000 people, is making savings across the business so it can keep prices low where it can.
Sainsbury said it will invest more than £500 million over two years to keep product prices low as “customers are watching every penny and every pound.” The supermarket chain is price matching discount rival Aldi on 240 products.
“Our rate of inflation is lower than our competitors’ and we’re stronger on price than we’ve ever been,” said Chief Executive Officer Simon Roberts on a media call.
Roberts said Sainsbury has a “balanced set of choices” as it works with suppliers to limit costs and to keep products in stock. This follows Kraft Heinz Co temporarily halting supply of most of its products, including ketchup, to Sainsbury rival Tesco Plc last week in a row over price increases.
Sainsbury is also pricing petrol competitively against rivals and independent fuel retailers, according to Roberts.
“We were the first to pass on the cut in duty on the day it happened,” said Roberts.