The boss of Sainsbury’s has warned customers are delaying spending ahead of the Budget – but said he is ‘doing everything’ he can to win the supermarket price war this Christmas.
As a bumper half-year results sent shares to their highest for nearly 12 years, Simon Roberts said there is ‘uncertainty’ after Rachel Reeves warned a fresh round of tax hikes is coming on November 26.
‘There will be some delayed spending until all of the news of the next few weeks comes through,’ he said.
Asked if he was worried about the impact of potential tax increases on households, Roberts said: ‘We have got to make sure, as a country and as an industry and here at Sainsbury’s, that we’re doing everything we can to make sure that that pressure on household finances is contained.’
Supermarkets have been slashing prices to attract new customers, despite inflationary pressure in the food chain.
Although households are ‘concerned about the cost of living’, Roberts said the Sainsbury’s offer has ‘never been stronger’, after food sales rose 5.7 per cent in the three months to September 13.
Shares boost: Sainsbury’s boss Simon Roberts (pictured) said he is ‘doing everything’ he can to win the price war this Christmas
The group has been attracting customers with an expanded range of Taste the Difference ‘dine-in’ meals as customers stay in rather than go out to eat.
Roberts said that costs in the system, including a £140million increase to its annual national insurance payments, have ‘gone up very substantially’ following last year’s Budget. ‘What we don’t want to see is any further cost impacts in the industry,’ he said.
‘When they do their weekly grocery shop, we’ve got to do everything we can to make sure that our value is as sharp and as strong as it can be.’
Sainsbury’s is among those to have told the Government it will be forced to increase prices if it follows through with plans to increase business rates for larger shops.
For the first half of the year, it said sales rose 4.8 per cent to £15.6billion as retail underlying operating profit went up 0.2 per cent to £504million.
This helped Sainsbury’s to upgrade its annual profit expectations for retail underlying operating profit to ‘more than £1billion’.
It had previously forecast that profits would remain flat.
Sainsbury’s shares rose 5.5 per cent, or 18.6p, to 355.8p – their highest since early 2014.
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