Sainsbury’s customers switching to own-brand products

• Sainsbury’s is observing customers “drawing back” some spending on general merchandise.
• Simon Roberts noted that during the year, pressure on household budgets is expected to worsen.
• Living expenses have been difficult for households due to rising fuel, food, and electricity costs.

As prices grow more swiftly, Sainsbury’s consumers are switching to own-brand products and reducing their non-essential expenditure, according to the supermarket’s boss.

Simon Roberts noted that during the course of the rest of the year, pressure on household budgets is expected to worsen.

Living expenses have been difficult for households as a result of rising fuel, food, and electricity costs.

Sainsbury’s is “doing everything we can to keep prices down,” according to Mr. Roberts.

When purchasing food, some consumers are “moving into economy own-label,” while Sainsbury’s is observing customers “drawing back” some spending on general merchandise, with larger “big price” items “particularly challenged,” according to Mr. Roberts.

Sainsbury’s sales decreased by 4% in the 16 weeks leading up to June 25 compared to the same period last year, but this variation was primarily attributable to how lockdowns in 2021 had boosted sales, he said.

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As a result of the pressure on household budgets, sales at Argos were also down, according to chief financial officer Kevin O’Byrne.

According to a survey conducted last month, people may be spending less on food, fuel, and clothing as prices rise.

“We really appreciate how hard it is for millions of people right now,” Mr. Roberts said while announcing Sainsbury’s most recent trading update. “That’s why we are investing £500m and doing everything we can to keep our prices low, especially on the things consumers buy most frequently.”

Doing the right thing for our clients and coworkers will continue to be at the top of our priority, he added. “The pressure on household finances will undoubtedly deepen during the remainder of the year,” he said.

According to Mr. Roberts, Sainsbury’s suppliers are also under pressure as the cost of essentials like fuel and fertiliser rises, partly as a result of the conflict in Ukraine.

According to him, the grocery store chain was collaborating “extremely closely” with its suppliers “to focus on how we navigate” these price increases.

In order to balance “keeping prices low for customers while also maintaining things in stock,” he stated.

Additionally, the shop has come under pressure from the advocacy organisation Shareaction to pay its contractors, including cleaners and security officers, the Living Wage of £9.90 per hour.

Sainsbury’s pays employees “as fully as we can,” according to Mr. Roberts.

The Bank of England has issued a warning that prices could climb even quicker in the coming months as the cost of living is rising at its fastest rate in 40 years.

Despite its most recent statements, Sainsbury’s stated that it continued to anticipate that its underlying profit before tax for the entire year will be between £630 million and £690 million.

The average yearly shopping price was predicted by research firm Kantar to increase by £380 this year.

The study also discovered that consumers are moving away from branded goods and toward supermarket own-label goods.

Retailers and other businesses have come under pressure from the government to lower prices in an effort to reduce the burden on people.

Small businesses, however, have criticised the plans, claiming that they have “already slashed all expenses, even vital ones, to the bone.”

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