Sainsbury’s begins trial of virtual queuing system for shoppers in five stores

Sainsbury’s determined to keep prices low, but inflation and Ukraine are clear obstacles


In its annual release of data to shareholders, colleagues and customers, Sainsbury’s accentuated many of the positives from the past year – its strong grocery sales (although flat compared with 2020-21), its push to be more sustainable, and its comparative value in a crowded market.

However, the future looks very much uncertain for the retailer and others, and Sainsbury chief executive Simon Roberts made that clear in a statement on the report. “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 said.

In fact, in its outlook for the coming 52 weeks, Sainsbury’s officials said: “The year ahead will be impacted by significant external pressures and uncertainties, including higher operating cost inflation and cost of living pressures impacting customers’ disposable incomes.” So the retailer is downgrading its projections of underlying profits before tax to be in the range of £630 million to £690 million. That is far below the £730 million it brought in during FY 2021/22. But, focusing on silver linings, the retailer said it is “significantly ahead of the £586 million reported in FY 2019/20.”

Inflation is already becoming a big barrier for UK customers, not just on the grocery side, but in any type of spending. Just as the team was putting the wrap on its annual report, inflation hit a high of just over 7%, and it could reach 9% by December, according to several sources. Reuters reported that the cost of food alone has jumped nearly 6% this year.

Sainsbury’s is determined to not let pricing get too out of control, though there are mitigating factors driving up costs, including supply, transportation and one other factor.

“The dreadful situation in Ukraine continues to have a profound impact,” Roberts said. “We’re doing everything we can to help with the humanitarian effort, and are working to manage the supply chain impacts. 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.”

Sainsbury’s last week dropped the prices on 150 high-volume fresh products last week, and Roberts says the company has investing heavily in driving investment to lower costs through savings plans.

The retailer is focusing heavily on innovation, including boosting its Taste the Difference line, whose sales have increased 15% from two years ago and received positive feedback from shoppers. Like so many other chains, it has put big investments into online since the start of the pandemic, and its says that 17% of all of its grocery sales come from its digital platform.

In addition, it is trying to ensure that its workers are taken care of, as they too are feeling the pinch of inflation.

“We prioritised investment of over £100 million into colleague pay,” Roberts said. “All Sainsbury’s and Argos retail colleagues now earn the Living Wage wherever they work in the UK, we were the first major supermarket to make this happen.”

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