Grocery chief warns of more pain to come
SAINSBURY’S boss said the pressure on household budgets ‘will only intensify’ over coming months as his firm reported falling sales.
Simon Roberts, chief executive of Britain’s second biggest supermarket, said customers were ‘watching every penny and every pound’ as the group also said its Argos and clothing divisions saw double-digit quarterly decreases.
But the retailer received a boost from rocketing petrol and diesel prices, with fuel sales for the 16 weeks to June 25 up by 48.3pc.
Supermarkets are facing an increasingly tough consumer environment with households squeezed by the steepest inflation in four decades.
Data from research firm Kantar shows only discounters Aldi and Lidl have seen sales increase in recent months. Between them they account for a bigger share of the market than Sainsbury’s. Roberts said: ‘We really understand how hard it is for millions of households right now and that’s why we are investing £500m and doing everything we can to keep our prices low, especially on the products customers buy most often.
‘The pressure on household budgets will only intensify over the remainder of the year.’
Sainsbury’s reported a 4pc decline in like-for-like sales excluding fuel for the first quarter, compared with the same period in 2021. Total grocery sales were down by 2.4pc in comparison with last year, when they were still inflated due to the Covid pandemic.
Online order numbers also ‘continue to normalise’ as customers return to stores.
But the Jubilee weekend was a bright spot, with sales of beers, wines and spirits described as ‘the highest ever outside of Christmas and easter’ and Pimm’s, sparkling wine and champagne ‘selling particularly well’.
Big ticket items such as furniture and technology have been falling out of favour, dragging Argos sales down by 10.5pc. non- food items in Sainsbury’s supermarkets fell 14.6pc while clothing saw a 10.1pc drop.
Matt Britzman, equity analyst at hargreaves Lansdown, said: ‘Jubilee celebrations might have provided a temporary distraction for consumers who indulged in Pimm’s, prosecco and strawberries, but we’re very much back to reality now.’