Sainsbury’s half-year profits have fallen as the retailer attempts to keep prices low.
This is for cash-strapped consumers who are experiencing record-high inflation.
The supermarket chain, which also owns Argos, reported an eight percent drop in underlying pre-tax profit to £340 million in the six months to September 17.
In addition, the grocer revealed that total revenues increased 4.4 percent to £16.4 billion in the first half of the year, compared to the same period last year.
Grocery sales increased by 0.2 percent, with the “big four” grocer blaming the “strong growth” on the relaxation of lockdown restrictions, market price inflation, and warmer weather.
The retailer maintained its full-year forecast of an underlying pre-tax profit of between £630 and £690 million.
The company claimed it had benefited from investments totaling £500 million that were made to lower prices for customers and help absorb cost inflation for key products.
Sainsbury’s claimed that it will be “well positioned to support customers as they manage additional cost-of-living pressures through the peak trading period and into next financial year.”
The group is halfway through a £1.3 billion cost-cutting program, which has led to the closure of standalone Argos stores and in-store restaurants.
The company anticipates closing about 50 Argos stores this year, with about 25 more to open inside bigger Sainsbury’s stores.
Sainsbury’s chief executive Simon Roberts: “We really get how tough it is for millions of households right now.
“Customers are watching every penny and every pound and we know that they are relying on us to keep food prices as low as we can.
“We will have invested more than £500 million by March 2023 in keeping prices lower by cutting our costs at a faster rate than our competitors, meaning we have more firepower to battle inflation.
“Over the past year and a half, we have consistently passed on less price inflation than our competitors and I am confident we have never been better value.”
Source: Retail Gazette