Sainsbury's investors eye sales as grocers step up focus on price cuts
Sainsbury's will be the latest supermarket to shed light on how its sales have fared in recent months as grocers battle to lure in squeezed shoppers amid rising food inflation.
The UK's second largest supermarket chain will publish its first quarter trading update on Tuesday.
It has not been immune to competition heating up among UK retailers in recent months, several of whom have come under pressure to cut prices to reel in consumers struggling with a higher cost of living.
The shift has partly been sparked by Asda promising its biggest price cuts in 25 years while discounters Aldi and Lidl continue to take on larger rivals with low-cost products.
Both Tesco and Sainsbury's have Aldi Price Match lines, offering hundreds of products price-matched to Aldi across stores.
Sainsbury's recently said it had more products in the scheme than any other retailer with around 800 items from fresh and cupboard food to wine and toiletries.
A group of analysts for AJ Bell pointed out that Sainsbury's shares were 'nudging toward their highest mark in a year, and they are not that far from their five-year Covid-inspired high either'.
'This suggests that fears of a supermarket price war, spearheaded perhaps by Asda, are yet to be realised,' they said.
The analysts noted that recent data from the Office for National Statistics showed food and non-alcoholic drink prices rose by 4.4% in the year to May – the highest level in more than a year.
Investors will be keen to see how the group's sales have fared in recent months, since reporting a 4.2% increase in full-year sales, excluding fuel, back in April.
At the time, it predicted its profits to be flat in the year ahead as stronger sales volumes were expected to be offset by weaker profitability amid the investment in price cuts.
This means that underlying profits should come in at about £1 billion for the year to the end of March 2026.
Investors will also be watching out for any update to its annual forecast on Tuesday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
28 minutes ago
- Daily Mail
Tax hikes Reeves could impose after the £3bn benefits U-turn
Households are on alert for further potential tax hikes in autumn after Keir Starmer handed major concessions to rebels in a bid to salvage flagship legislation on health and disability benefits. On Friday, the government confirmed a U-turn on its cuts to disability benefits in order to avert a rebellion by more than 120 Labour backbenchers. The reversal leaves a £3billion hole in Chancellor Rachel Reeves ' financial plans, according to the Institute for Fiscal Studies. Meanwhile, the Resolution Foundation warned that tax rises may be needed for her to now meet her fiscal rules. The initial benefit reforms would have saved the government £5.5billion by the end of the Parliament. The planned cut to personal independence payments eligibility was set to raise the bulk of this saving, £4.5billion. However, according to the IFS, the revised package of reforms will save only £2.5billion, so will cost the government £3billion relative to their previous plans. Under the change in tack, people who currently receive personal independence payments (PIP), or the health element of universal credit, will continue to do so. Instead, planned cuts will now only hit future claimants. Liz Kendall, Secretary of State for Work and Pensions, said: 'We have listened to people, we are in a good place now'. Most economists and think tanks think tax rises in the Autumn Budget 2025 are now inevitable. Tom Waters, an associate director at IFS, said: 'These changes more than halve the saving of the package of reforms as a whole, making the Chancellor's already difficult Budget balancing act that much harder. 'The decision is to protect existing health-related benefit claimants from the reforms, thereby making the savings entirely from new claimants to these benefits. 'This will create big differences – thousands of pounds a year, for many years in some cases – between similar people with similar health conditions who happen to have applied at a slightly different time.' Samuel Mather-Holgate, an independent financial adviser at Mather and Murray Financial told Newspage: 'With Starmer doing more U-turns than someone doing the bleep test, taxes are going up. 'There's no way that other departments can mitigate these changes to their budget.' Which taxes could be increased? Reeves has ruled out taxes on the working people, including income tax , National Insurance for employees, VAT and corporation tax. Other taxes will be in her sights. Capital gains tax Higher capital gains tax could be one option for Reeves. Capital gains tax is levied on profits from assets ranging from shares to second homes, buy-to-let properties and personal possessions. The rates for stocks and shares gains were hiked in the 2024 Autumn Budget to 18 per cent for basic rate taxpayers and to 24 per cent for those paying higher rates of tax. The profits from assets like sharers tend to come from people taking a risk, whether an entrepreneurial one or an investment one, making capital gains tax a likely target for hikes. Inheritance tax Reeves could have inheritance tax in her sights again It is a growing money-spinner for the government, with the number of households falling in scope for it rising. In the 2024 Autumn Budget, Reeves capped the availability of Business Relief and Agricultural Relief, and halved the relief available on Alternative Investment Market shares. Reeves also unveiled plans to bring pensions into the scope of inheritance tax from 2027. Further tweaks and amendments could happen. Pensions Pensions are a major source of wealth for many people, making them a prime target for Reeves. Last year, while Reeves dragged unused pension assets into the inheritance tax net from April 2027, she did not go as far as some experts feared. That is not to say that she will not meddle with pensions later this year. HMRC recently announced a consultation on salary sacrifice - when people forgo a pay rise or bonus and add to their pension instead, which helps avoid higher marginal tax rates. It has prompted speculation that Reeves could introduce a cap on the amount of salary sacrifice people can use. There is also speculation about the reintroduction of the pensions lifetime allowance. The Chancellor could also look at reforming income tax relief on pension contributions. Tax thresholds freeze The freeze on certain tax thresholds since 2021 has created a huge stealth tax raid in recent years. The frozen basic rate threshold, currently £12,570, drags more people into paying income tax and means that the real value - adjusted for inflation - of the tax-free allowance has been diminished. Stalling the higher rate threshold at £50,270 has shifted more people and a greater slice of earnings into the 40 per cent bracket. John Woolfitt, a director at Atlantic Capital Markets, told Newspage: 'A "stealth tax" manoeuvre will be high on the cards. 'Income tax allowance and the higher-rate threshold currently rise with inflation . Freezing or delaying future increases effectively raises income tax, without officially having to announce a hike.' He added: 'Targeting high earners and wealth transfers could also be seen and a populist move as the government tries to sure up support from the broader electorate.' According to the Resolution Foundation, extending the freeze in personal tax threshold by one year will save £4billion a year, 'though further consolidation is likely to be needed in the Budget this Autumn.' Property Businesses Higher employer national insurance contributions are already hammering businesses across Britain. However, under growing pressure to boost the Treasury's coffers, Reeves could set her signs on corporation taxes, VAT exemptions or other duties. 'This would really impact the already fragile business confidence in the UK', Woolfitt said. Wealth tax Some campaigners believe Reeves should impose a wealth tax to boost the tax-take and quash inequality. Tax Justice UK is calling on more taxes for the super-rich to be introduced by the current Government. It wants to see a 2 per cent wealth tax on assets over £10million, which it says will raise up to £24 billion a year. It also wants to apply national insurance to investment income, close inheritance tax and non-dom loopholes, and introduce a 4 per cent tax on share buybacks. It remains unclear whether a wealth tax is on Reeves' agenda and how it would work in practice. An unprecedented 16,500 wealthy Britons are predicted to leave this year amid higher taxes and a gloomy economic outlook.
Sky News
38 minutes ago
- Sky News
Welfare concessions 'common sense', says PM - as he defends U-turn
Sir Keir Starmer said changes to his welfare bill "strike the right balance" after making concessions to his backbench MPs. The prime minister described the U-turn as "common sense" and said it means "we can now get on with the job". Sir Keir faced a significant rebellion over plans to cut sickness and disability benefits as part of a package he said would shave £5bn off the welfare bill and get more people into work. Speaking to reporters on Friday, he stood by his position that the welfare system needs reform as "it doesn't work, and it traps people". He added: "We need to get it right. That's why we've been talking to colleagues and having a constructive discussion. "We've now arrived at a package that delivers on the principles with some adjustments, and that's the right reform, and I'm really pleased now that we're able to take this forward. "For me, getting that package adjusted in that way is the right thing to do, it means it's the right balance, it's common sense that we can now get on with it." The concessions include exempting existing Personal Independence Payment claimants (PIP) from the stricter new criteria, while the universal credit health top-up will only be cut and frozen for new applications. 5:45 More money will also be front-loaded into helping people find jobs, though it is not clear how much beyond the £1bn already announced. The changes came after 127 Labour MPs signed an amendment calling for the cuts to be delayed and consulted on with disabled people. Rebels feared the reforms wouldn't actually help people find work while pushing thousands of disabled people and children into poverty, as per the government's own impact assessment. The discontent threatened to derail the Universal Credit and Personal Independence Payment Bill when it comes before the Commons for a vote on Tuesday, on the week that marks a year of Starmer in government. Asked what he would do about a "hole" in the public finances that the changes are said to leave, Sir Keir said the funding will be set out in the autumn budget "in the usual way". The concessions on PIP alone will protect an estimated 370,000 people currently receiving the allowance who were set to lose out following reassessment. Economists at the Institute for Fiscal Studies and the Resolution Foundation have both suggested that the changes could reduce savings intended in the original package by up to £3bn. Chancellor Rachel Reeves is also under pressure to find money to pay for the U-turn on cuts to winter fuel, which followed a drubbing at the local elections in May. Asked about the series of U-turns, Work and Pensions Secretary Liz Kendall earlier said: "Sometimes there's strength in listening. "I really believe that to be the case, that you end up in the right position when you talk to all of those with knowledge and experience and actually, if you want decisions to be the right ones and to last for generations to come, I believe that's how you make the right changes." However, she would not guarantee the bill will pass next week. Some 83 Labour MPs would need to rebel for the government to be defeated. 0:43 Last night Dame Meg Hillier, one of the leading rebel voices, hailed the concessions as "massive changes" to protect vulnerable people and involve disabled people in the design of future reforms. However, not all the rebels have been satisfied with the changes, with several suggesting they would create a "two-tier system". Sky News is aware of at least 20 MPs who currently intend to still vote against. Many others are undecided. The concessions came after Downing Street publicly stuck to its guns while engaging in a frantic ring-around to get rebels onside, which further angered MPs. Many have called for a reset in relations with Downing Street, as the fallout from the rebellion threatens to cause lasting damage. Conservative leader Kemi Badenoch criticised the U-turn, saying the government's failure to make "minor savings" on welfare showed they were unable to deal with major issues.
Powys County Times
42 minutes ago
- Powys County Times
Cranswick reveals boss lands £4.6m pay package amid pig farm abuse scandal
Meat giant Cranswick revealed its boss has seen his pay package swell by more than a third to £4.6 million as one of its farms remains at the centre of animal abuse claims. In its annual report, the firm – Britain's largest pork supplier – said chief executive Adam Couch landed a £1.7 million annual bonus and potential long-term share awards worth £1.9 million, on top of his £847,400 salary in the year to March. His total pay jumped 34% higher, up from £3.4 million in 2023-24. The East Yorkshire-based group also revealed that Mr Couch saw his salary hiked by more than £127,000 to £974,600 on April 1 as part of a pay review. Details of his pay and bonuses comes less than two months after abuse claims emerged against a pig farm run by the business. The pork producer suspended using Northmoor Farm in Lincolnshire after covert footage emerged appearing to show workers at the site abusing piglets. Workers were filmed appearing to hold piglets by their hind legs and slamming them to the ground, using a banned method of killing the animals known as 'piglet thumping'. Major supermarkets Asda, Morrisons, Sainsbury's and Tesco suspended Northmoor Farm as a supplier, and Cranswick shortly afterwards launched an independent review into its animal welfare policies and livestock operations. In its annual report on Friday, Mr Couch said: 'We have always placed the highest importance on animal health and wellbeing, and continuously aim to have the most stringent standards in the sector. 'We take seriously any instance, anywhere in our supply chain, where behaviour fails to meet those standards. 'We are therefore instigating a new, fully independent, expert veterinarian review of all our existing animal welfare policies, together with a comprehensive review of our livestock operations across the UK. 'We will provide a further update on this work in due course.' On the chief executive's salary rise, the group's remuneration committee added in the report that there was 'very strong support' for the increase among shareholders. It added that his base salary previously did not 'appropriately and fairly reflect Adam's extensive experience and his exceptional contribution to the impressive performance of the business'. 'We believe it is critical to take decisive action now to ensure Adam is appropriately incentivised and retained to deliver Cranswick's long-term growth ambitions,' according to the committee. Cranswick's results last month showed record sales and profits for the past year. The firm revealed revenues grew by 6.8% to £2.72 billion for the year to March, compared with the previous year, while pre-tax profits grew by 14.6% to £181.6 million.
