Sainsbury’s cashes in on Xmas bonanza
SAINSBURY’S became the latest grocer to vow to keep prices low as it upgraded its profit forecasts on the back of bumper Christmas sales.
On an upbeat day for the British retailers, the country’s second biggest supermarket said it now expects profits ‘of at least £720m’ for the financial year to March 31.
that is 9pc higher than its previous forecast of £660m, and more than double the £356m it made last year. the supermarket cashed in as families celebrated Christmas with luxuries. It sold a record 21.5m bottles of champagne and other sparkling wine in the six weeks to January 8.
Shares jumped 3.1pc, or 8.7p, to 288p. But chief executive Simon Roberts said this year will be ‘tough’ as the country faces a cost of living crisis. he vowed to make low prices a ‘key priority’ and doubled down on its promise to match German discounter aldi on 150 core products.
It comes as the Bank of England expects inflation to hit 6pc by spring while analysts have warned that the energy bill price cap could jump by more than £700 in april. National insurance rates will also rise in april, costing taxpayers an extra £12bn.
and the average shop is becoming more expensive, with grocery prices 3.5pc higher in December than a year earlier.
aldi and Lidl this week pledged to remain the lowest priced grocers in the UK, setting the scene for a price war.
Pressure is mounting on others including tesco, which is due to publish a trading update today.
Retail analyst Richard hyman, at consultancy tPC, said: ‘Because price inflation is going to outstrip wage inflation and there are going to be price rises, the good news for consumers is that competition is so intense it will not be that easy to put prices up. aldi and Lidl will make sure everyone is kept on their toes.’
Sainsbury’s, which has 1,411 stores and 189,000 staff, said its promise of a Christmas dinner as cheap as aldi’s poached shoppers from rivals. Grocery sales in the six weeks to January 8 were 0.8pc higher than Christmas 2020 when sales were buoyed by lockdowns. they were up 6.8pc on pre-pandemic levels. Roberts said it had its ‘biggest ever new year’. It expects to report at least £720m in profit for the year ending in March, £60m more than forecast.
UBS analysts expect the grocer, which accounts for 15.4pc of the market, to have sold £29bn of food and other goods in the year.