Sainsbury’s has posted subdued half-year profits, after taking a hit to keep prices competitive for customers and boost pay for staff.
The supermarket giant, which also owns Argos, said underlying pre-tax profit dipped eight per cent to £340m over the half-year to 17 September , compared with the same period last year.
It had previously warned its profits would be dented by its investment in prices and wages.
Customers have also putting fewer items in their baskets and switching to own brand products to trim their grocery bills, Sainsbury’s boss Simon Roberts told reporters on Thursday morning.
There had been a “marked move” towards eating at home rather than dining out at venues. This trend was likely to continue into the winter.
Millions of households were finding the cost of living “tough” currently, the big four grocer acknowledged yesterday.
Shoppers were “wanting to spread out the cost of Christmas,” Roberts told CityA.M.
Ahead of a festive period when consumers will be trying to tighten their belts, customers had been “buying little and often” and shopping earlier, he said.
Analysts warned the supermarket’s middle market position meant it would not be a huge benefactor from Brits shunning restaurants in favour of cooking more extravagant meals at home.
“They will see some customers trading down from Waitrose and M&S but lose customers to discounter rivals,” Orwa Mohamad, an analyst at Third Bridge said.
The retailer also revealed that sales moved higher over the period as it was buoyed by a stronger second quarter.
Sainsbury’s stuck to its full year guidance for underlying pre-tax profit of between £630 and £690m.