Sainsbury’s set for tough festive trading period
SAINSBURY’S has added to fears over lacklustre consumer spending in the run-up to Christmas, as it warned over an uncertain outlook amid “unprecedented times”.
The supermarket giant set the scene for a more difficult festive trading period as signs point to consumer retrenchment in the face of Brexit worries.
Retail chain Halfords also cautioned that shoppers are holding back on spending on discretionary items.
Announcing half-year results, Sainsbury’s said: “The consumer outlook is uncertain as we head into our key trading period.”
The chain added its markets also continued to be “highly competitive and very promotional”.
The comments came as Sainsbury’s reported a 40 per cent slump in bottomline profits to £132million for the six months to September 22 after a raft of costs, including store restructuring and expenses related to its planned £12billion merger with Big Four rival Asda.
But on an underlying basis, pre-tax profits rose 20 per cent to £302million. Sainsbury’s boss Mike Coupe said the group was facing “unprecedented times” as the country is left waiting for news of a Brexit deal with less than six months to go until the March 29 withdrawal.
Mr Coupe said: “We have to strike a note of caution, because we are in unprecedented times in my experience.”
But he said the group was not bracing itself for a wash-out festive season.
“Consumers will trade up and they tend to come to Sainsbury’s more,” he said Despite the caution, Sainsbury’s said it remained on track for full-year expectations, with analysts pencilling in underlying pre-tax profits of £634million, up from £589million in 2017-18.
Mr Coupe admitted the group had seen “bumpy” stock availability in its stores over the early summer period after controversial recent pay and contract changes for its 135,000 store staff and managers.
He insisted availability had returned to normal levels.