Sainsbury’s has reported a decrease in profits for the six months ended 12 September 2022, as it shields customers from rising costs amid the ongoing cost-of-living crisis.
The Big 4 grocer revealed that underlying pre-tax profits had dropped by 8% to £340 million, despite seeing a 4.4% increase in sales across the group.
Sainsbury’s CEO Simon Roberts said the supermarket was keeping prices lower by cutting costs at a faster rate than its competitors, meaning it has “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,” he added.
Grocery sales were up 0.2%, which was attributed to the easing of lockdown restrictions, market price inflation and warmer weather.
Sainsbury’s also reported a drop in retail operating profit by 9%, reflecting its investment in value, reduced grocery and general merchandise volumes post-pandemic and higher operating costs.
According to the company, this was also partially offset by a higher fuel contribution.
Roberts said: “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.”
The company will have invested “over £500 million by March 2023” in a bid to keep prices lower amid rising inflation, meaning it is well placed to support customers as they manage further cost-of-living pressures through the golden quarter and into 2023.
Annual profit expectations remain on track to be between £630 and £690 million, a drop from the £730m achieved in 2021/22, saying that trading momentum had remained strong despite the squeeze on shoppers’ budgets.
The trading update comes as Sainsbury’s begins to recruit 18,000 additional seasonal jobs to help meet the extra demand over the Christmas period.
