Sainsbury’s ‘doing everything’ to win supermarket price war amid Budget tax raid fears
- Boss Simon Roberts says household finances remain under pressure ahead of budget
Sainsbury’s is ‘doing everything’ to win the supermarket price war, the group’s chief executive said, and warned the Chancellor against further tax rises.
Simon Roberts said there was ‘uncertainty’ among consumers ahead of the 26 November Budget, in which Rachel Reeves is expected to increase taxes on customers and businesses.
In a speech earlier this week, the Chancellor did not rule out increases that were contrary to the manifesto and fears that he was prepared to increase them. income taxnational insurance, corporation tax or VAT.
Asked if he was concerned about the impact of potential tax rises on households, Roberts said: ‘As a country, as an industry and here at Sainsbury’s we need to make sure we do everything we can to make sure the pressure on household finances is contained.’
This development comes at a time when supermarkets are reducing prices to attract new customers, despite inflationary pressure on the food chain.
Roberts said although households were ‘concerned about the cost of living’, Sainsbury’s offer had ‘never been stronger’ after food sales rose 5.7 per cent in the three months to September 13.
Sainsbury’s is among major retailers telling Labor tax rises would put pressure on Brits’ weekly shops
The group is attracting customers with a wide range of Taste the Difference ‘dine-in’ meals as customers choose to stay at home rather than eat out.
Roberts said costs on the system, including a £140 million increase in Sainsbury’s annual National Insurance payments, had ‘increased very significantly’ since last year’s budget.
‘What we don’t want to see is further cost impact in the industry,’ he said
Retailers were hit by £7bn worth of cost increases in last year’s budget.
‘[Customers are] We’re concerned about the uncertainties out there, and so we have to do everything we can, and we’re doing, to make sure our value is as sharp and strong as possible for customers when they do their weekly shopping.
Retailers have also called on Labor to not raid the industry further or risk prices rising further for customers.
Sainsbury’s is among those telling the Government it will be forced to increase prices if larger stores implement plans to increase business rates.
Under the proposed reforms, around 4,000 stores, including ‘big box’ supermarkets, would have to pay higher tax to reduce the bill for smaller retailers.
The British Retail Consortium said no store should pay more and cheaper bills for smaller stores should instead be paid by offices and warehouses.
Roberts said senior government officials had shown a ‘willingness to listen’ to businesses, including himself, on the issue, hinting at the hope Reeves could offer major retailers a reprieve.
Sainsbury’s and rival Tesco compete for market share with discounters Aldi and Lidl by cutting prices.
Customers’ move away from third-largest grocer Asda has also benefited Sainsbury’s.
It was stated that in the six months to September 13, sales increased by 4.8 percent to 15.6 billion pounds, while retail core operating profit increased by 0.2 percent to 504 million pounds.
This has helped Sainsbury’s lift its annual profit expectations for retail core operating profit to over £1bn.
He had previously predicted profits would remain flat.
Dan Coatsworth, market manager at AJ Bell, said: ‘Latest results give the impression that the business is in good shape. It raised profit guidance, announced a special dividend and increased share buyback plan, and the dividend increased by more than its U.S. rate. inflation.
‘Sainsbury shares have had a good run since April, but the weak market response to half-year results suggests investors may be starting to wonder whether the supermarket has reached its peak.’
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