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| Sainsbury's profit set to dip as price war looms | Sainsbury's profit set to dip as price war looms |
| (about 3 hours later) | |
| Sainsbury's has forecast that shop profits will flatline or fall in the coming year as the supermarket sector prepares for a possible price war. | |
| The retailer said it expects income to dip to £1bn as it continues to invest in lowering grocery prices. | The retailer said it expects income to dip to £1bn as it continues to invest in lowering grocery prices. |
| Last week, Tesco admitted that it could take a significant hit if it is forced to cut prices after Asda - now under the leadership of industry veteran Allan Leighton - announced it would reduce grocery costs to boost the struggling store. | |
| A race to lower prices could help households who are still struggling with the cost of living at a time when bills, such as energy and water, are increasing. | A race to lower prices could help households who are still struggling with the cost of living at a time when bills, such as energy and water, are increasing. |
| Sainsbury's chief executive Simon Roberts said: "We're in the strongest position we've ever been [on price competition] and we intend to stay there." | |
| Sainsbury's expects the impact of lowering prices to be relatively small. It predicts underlying retail profit will tick down by around £36m over the year. | Sainsbury's expects the impact of lowering prices to be relatively small. It predicts underlying retail profit will tick down by around £36m over the year. |
| This is far below the potential £400m hit announced by Tesco. | This is far below the potential £400m hit announced by Tesco. |
| Sainsbury's set out its expectations as it revealed that full-year sales rose by 3.1% to £31.5bn. Pre-tax profit jumped from £277m to £384m. | Sainsbury's set out its expectations as it revealed that full-year sales rose by 3.1% to £31.5bn. Pre-tax profit jumped from £277m to £384m. |
| While revenue at Sainsbury's grew strongly over the 12 months to 1 March, sales continued to fall at Argos although it said that the situation improved as it boosted traffic to the brand's website. | While revenue at Sainsbury's grew strongly over the 12 months to 1 March, sales continued to fall at Argos although it said that the situation improved as it boosted traffic to the brand's website. |
| The supermarket also reported an 8.9% drop in fuel sales to £4.7bn. It blamed "reduced demand" as well as the lower cost of petrol and diesel due to "falling commodity prices in a highly competitive market". | The supermarket also reported an 8.9% drop in fuel sales to £4.7bn. It blamed "reduced demand" as well as the lower cost of petrol and diesel due to "falling commodity prices in a highly competitive market". |
| Official data released on Wednesday showed that the falling cost of motor fuel helped drive down the overall rate of inflation. | Official data released on Wednesday showed that the falling cost of motor fuel helped drive down the overall rate of inflation. |
| Inflation eased by more than expected to 2.6% in the year to March, from 2.8% in February. | Inflation eased by more than expected to 2.6% in the year to March, from 2.8% in February. |