Sainsbury's wary over inflation as sales increase

Sainsbury’s has flagged “encouraging” trading but warned of inflationary pressures amid Middle East uncertainty.

The supermarket saw total comparative retail sales – excluding fuel – grow 2.7 per cent to £9.15 billion in the 16 weeks to June 20.

Sales of the Sainsbury’s brand grew 3.1 per cent to £8.04 billion, with year-on-year grocery sales up 3.6 per cent.

However, the firm warned of some caution among shoppers, with chief executive Simon Roberts saying inflation is “coming through”.

He said: “It’s encouraging to see some of the industry trade bodies reducing some of their forecasts, but there is still uncertainty over how inflation will grow.

“There is pressure on inflation in the system.

“It’s not coming through as significantly as some had expected, but it is still coming through.”

He added the supermarket’s grocery inflation is lower in the most recent quarter compared to the previous period.

The operator also revealed its general merchandise arm – which includes clothing brand Tu – and its Argos arm both reported declines.

Sales across general merchandise – which includes homeware, technology and other items – slid 6.3 per cent, while Tu was down 2.1 per cent in the face of tough year-on-year comparisons.

The group said sales at its Argos business dipped 0.5 per cent as positive volume growth was “offset by the impact of subdued consumer spending on average selling price”.

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