LONDON (ShareCast) - (Sharecast News) - UK supermarket chain Sainsbury's said first-quarter underlying sales fell 4% as consumers started to cut back on discretionary spending amid the cost of living crisis.
There was a sharp fall in general merchandise sales, which declined 11.2% in the 16 weeks to June 25. Total retail sales excluding fuel were down 4.5%, but were 5.4% higher than pre-pandemic levels.

Grocery sales were down 2.4% compared with last year (when pandemic restrictions boosted spending at supermarkets), while sales at its Argos division fell 10.5% in the quarter.

Sainsbury's maintained guidance for annual underlying profit before tax of between £630m and £690m, but chief executive Simon Roberts warned that the pressure on household budgets "will only intensify over the remainder of the year" as inflation hits incomes.

"We really understand how hard it is for millions of households right now," he said as UK inflation hit a 40-year high of 9.1% in May.

Roberts pledged to invest £500m in attempting to keep 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."

Reporting by Frank Prenesti at Sharecast.com

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