The supermarket warns of “significant uncertainties” ahead as customers face a squeeze on finances.
Image source, Reuters
Sainsbury’s has seen its profits more than double as the supermarket recovers from coronavirus costs.
The company reported an underlying profit before tax of £730m in the year to March, up from £357m in 2020-21.
But bosses warned profits would be lower this year as it tries to stay competitive on price and support customers facing higher living costs.
The supermarket said its cost savings plan had enabled it to increase food prices at a lower level to competitors.
Sainsbury’s bumper profits come as research suggests the average food bill could increase by £271 this year as prices continue to rise.
Grocery prices were 5.9% higher in April than a year ago, the biggest increase since December 2011, according to research company Kantar.
Supply chain issues, the Ukraine war and rising raw material costs are all contributing to soaring food prices.
It has led to Sainsbury’s to follow the UK’s biggest supermarket Tesco in forecasting lower profits.
Sainsbury’s said there were “significant uncertainties” weighing on the business ahead, due to higher cost pressures and the squeeze on household incomes.
“We know just how much everyone is feeling the impact of inflation, which is why we are so determined to keep delivering the best value for customers,” said Simon Roberts, chief executive of Sainsbury’s.
The supermarket reported a rise grocery sales, up by 7.6% from two years ago, partly due to dining out being restricted by Covid restrictions.
However, non-food sales were hit hard by difficulties with supply chains, with general merchandise sales falling 4.6% on 2019-20.
- 13 April
