Sainsbury’s profits double as bosses warn of impact of cost-of-living crisis

Sainsbury’s profits have more than doubled to £730 million, with retail sales (excluding fuel) up 2.9% to £29.9 billion, while bosses warn of lower profit for the current year due to soaring inflation.

The strong results for the 12-month period ending 5 March 2022 reflected an increase in grocery sales, following the supermarket’s significant investment in core grocery. This was funded by cost savings, fuel and a more profitable general merchandise and clothing business.

Grocery sales were up 7.6% as the supermarket continued to see benefits from the pandemic, while non-food and general merchandise sales fell by 4.6%, largely attributed to supply chains difficulties.

Despite the good news, bosses have warned of lower profit for the current year due to soaring inflation, as the supermarket focuses on supporting customers through the cost-of-living crisis.

Sainsbury’s said the year ahead would be impacted by significant external pressures and uncertainties, including higher operating costs and the cost-of-living pressures impacting customers’ disposable incomes.

It revealed that underlying profit before tax for 2022-23 is expected to be between £630 million and £690 million – a significant drop from the £703 million analysts had been expecting.

Read more: Tesco profits triple as supermarket warns of impact of soaring inflation

“In a year of unprecedented change we have been relentlessly focused on putting customers and colleagues first while delivering the first year of our plan to put food back at the heart of Sainsbury’s,” said Simon Roberts, chief executive of J Sainsbury plc.

“We said we would invest in value, innovation and service and that’s exactly what we’re doing.”

On the topic of inflation and the cost-of-living crisis, Roberts added: “We know just how much everyone is feeling the impact of inflation, which is why we are so determined to keep delivering the best value for customers.”

He highlighted the grocer’s investment into lowering food prices, funded by making savings elsewhere in the business.

“As a result, we continue to inflate behind competitors on the products customers buy most often. Last week we announced the next bold phase of investment, lowering prices across 150 of our highest volume fresh products.”

“We have a clear long term focus on keeping prices low and we remain committed to helping everyone eat better, whatever the external environment may bring.”

Roberts also took the opportunity to add that the supermarket had invested over £100 million into pay rises, pointing out that Sainsbury’s was “the first major supermarket” to pay all colleagues the Living Wage.

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