Sainsbury’s CEO Simon Roberts has defended the “incredibly competitive” grocery sector amid profiteering accusations and said that the supermarket is “battling” to pass savings onto customers.
The grocer, which has reported a rise in quarterly grocery sales of 11% and a jump in revenue of 9.2%, was one of four retailers questioned by MPs last week over claims that it had been profiteering from high food and fuel prices.
However, Roberts said today that Sainsbury’s is “battling inflation on behalf of customers”, adding that the supermarket’s margins last year were “less than 3%”.
“I challenge anyone to find a sector that makes margins as low as grocery,” he added.
Following the Business and Trade Committee’s probe into profiteering claims, Roberts said: “I don’t think there’s any value in blaming each other for inflation. We’re all in this together, we all want to see inflation come down, and I think the grocery sector is working incredibly hard to give customers the best value that we can.”
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While Sainsbury’s has invested over £60m in lowering prices since March, Roberts explained that “energy costs are still high and labour costs have been elevated permanently, so the impact of those on our food prices won’t subside.”
“What will drive reductions is the input costs of commodities that are continuing to come down.”
He insisted that Sainsbury’s has been quick to lower prices when it can, having most recently launched a second round of reductions across its own-brand milk range.
However, he warned that prices would not come down to the levels seen before the cost-of-living crisis.
“Labour costs have gone up – our own labour costs are up over 10% year on year, and those are now fixed into the cost base.
“So we would expect inflation to continue to improve but it’s not going to go back to where it was before, because the cost of producing food is clearly elevated from where it was a year or two back.”
Fuel pricing
The supermarket was among those investigated over high fuel prices by the Competition and Markets Authority (CMA).
Roberts shared his support for the watchdog’s motion that retailers should share changes in fuel prices on an open data platform.
He said: “We absolutely welcome this improved transparency and improve visibility for customers on fuel pricing. We think it will really benefit customers to see everyone’s prices in real time. And the reason we think that is because we’re really competitive on fuel.
“In every location that we trade, we’re either the cheapest, or the second cheapest. And that’s been our position for a very long period of time.”
Roberts pointed out that despite only operating 4% of fuel locations in the UK, it accounts for nearly 10% of the volume sold.
He said that “reflects the fact that customers see the value in our offer in fuel”.
