Supermarket giant Sainsbury's is making a major change across all of its supermarkets. It comes after ASDA and Morrisons promised to make the same change - though there is no word yet if Aldi, Tesco, Lidl and M&S will do the same.
With inflation rising and the cost of living crisis growing, the retail giant say they want to deliver 'the best value for customers' and has lowered prices across 150 of their highest volume fresh products so far.
It comes days after Morrisons and Asda announced sweeping reductions on everyday items.
Profits at Sainsbury’s roared back into the black after a year of losses, as the supermarket enjoyed the benefits of the pandemic that saw much of the high street shut for long periods. Bosses revealed pre-tax profits for the 12 months to March 5 hit £854 million, compared with a £164 million pre-tax loss a year earlier.
This was also a three-fold increase on pre-pandemic profits of £278 million. However the supermarket warned that profits would be dented in the coming year as it reduces prices to help customers with the cost-of-living crisis.
READ MORE: Morrisons follows ASDA and announces major change in all supermarkets
But before reducing prices, it said shareholders would enjoy a dividend bonanza, with payouts of 13.1p per share – a jump of 24% on a year ago. The company’s preferred profit measurement – underlying pre-tax profits, which strip out one-off costs – hit £730 million.
However, the grocer warned this would be between £630 million and £690 million for the coming year. Sainsbury’s had a particularly strong time in its grocery division, with sales up 7.6% versus pre-pandemic levels – although these were flat on the previous year.
General merchandise sales were down 4.6% versus pre-pandemic levels as supply chain issues hit and fell even further in the past 12 months – dropping 11.9%. Overall revenues were £29.9 billion – up 2.9% compared with a year earlier, according to PA.
Chief executive Simon Roberts said: “We know just how much everyone is feeling the impact of inflation, which is why we are so determined to keep delivering the best value for customers. We have been able to drive more investment into lowering food prices funded by our comprehensive cost savings plans.
“As a result, we continue to inflate behind competitors on the products customers buy most often. Last week we announced the next bold phase of investment, lowering prices across 150 of our highest volume fresh products.” He also pointed out that Sainsbury’s had spent £100 million on pay rises for staff, bringing their salaries up to the Real Living Wage.
ASDA and Morrisons have already vowed to slash prices on hundreds of products and increase pay for staff.
Mohsin Issa, co-owner of Asda, said: “We know that household budgets are being squeezed by an increasing cost of living and we are committed to doing everything we can to support our customers, colleagues and communities in these exceptionally tough times. We’re standing side by side with the families and communities who are juggling so many demands at the moment.
“We’re taking unprecedented action to give families some additional stability and certainty in their weekly shopping by lowering and locking over 100 prices until the end of the year. We’re also proud to be investing in increasing the pay for our hard-working store colleagues and continuing to support the communities we are part of.”
Morrisons chief executive, David Potts, said: "“We know that our customers are under real financial pressure at the moment and we want to play our part in helping them when it comes to the cost of grocery shopping,” he said. "These price cuts will have a noticeable and long-term impact on our customers’ budgets and demonstrate our commitment to offering them the best possible value."
