The CEO of Sainsbury’s warned this morning that rising pressure on household budgets “will only intensify over the remainder of the year” as he pledged to invest more money into improving value for shoppers.
Simon Roberts, chief executive of the supermarket group, said it is working to reduce costs across its operations amid continued inflation.
It came as the retail giant revealed that like-for-like sales, excluding fuel, declined by four per cent over the 16 weeks to 25 June, compared with the same period last year.
Sainsbury’s hailed a “good” performance in its grocery business, which saw sales dip 2.4 per cent against levels from last year, which had benefited from pandemic restrictions on other parts of the retail sector.
Roberts said: “We really understand how hard it is for millions of households right now and that’s why we are investing £500m and doing everything we can to keep our prices low, especially on the products customers buy most often.
“We’re working hard to reduce costs right across the business so that we can keep investing in these areas that customers care most about.
“The progress we are making on improving value, quality, innovation and service is reflected in our improved grocery volume market share.
“The pressure on household budgets will only intensify over the remainder of the year and I am very clear that doing the right thing for our customers and colleagues will remain at the very top of our agenda.”
Sainsbury’s is braced for a shareholder revolt on Thursday, at a meeting at its Holborn headquarters, over pay increases for staff.
Shareholders have proposed a resolution urging the grocer to become a living wage accredited employer.
In the trading update on Tuesday, Roberts acknowledged the dispute over wages and said the supermarket had raised pay by 25 per cent over the past five years.
Staff at Argos had seen pay increase 39 per cent in the same period as well.
“We are proud to be the first major supermarket to pay the Living Wage to all colleagues, regardless of where they live,” Roberts stated.
Sainsbury’s was facing a double whammy” of declining sales growth amid the cost of living crisis and tough annual comparatives due to pandemic restrictions last year, Alex Smith, global sector lead for retail research at Third Bridge said.
He said: “Discounters are expected to continue to gain market shares from the big four supermarkets. Sainsbury’s will look to reduce their margins on fresh food to be more competitive.”