Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Membership today.
Join today
Already a member?
Log in
The boss of Sainsbury’s has said it is important “we don’t see a repeat” of previous Labour budgets after positive talks with ministers.
Simon Roberts, chief executive of the UK’s second largest supermarket chain, has said he believes the current government is “listening” after taking part in talks at No 11 Downing Street last week.
Mr Roberts urged the chancellor to avoid further significant increases to business taxes and labour costs at the autumn Budget next Wednesday.
“I think this government is listening to business,” he said.
“We’ve had the opportunity to meet with figures from government and stress that it is really important we don’t see a repeat from previous budgets.”
The supermarket executive urged the government to bring about positive reform to the business rate tax system, help encourage businesses to hire, and increase capacity rules linked to farming investments.
It came as he warned “many households are finding things tough at the moment” amid pressure on consumer budgets.
The London-based company said it has benefited through pricing measures, such as its loyalty Nectar Prices and its Aldi Price Match comparison scheme, to help bring in more customers.
On Thursday, Sainsbury’s improved its profit outlook as it revealed stronger grocery sales over the past half-year.
The retailer said it saw shoppers buying greater volumes of products, as price inflation slowed over the period.
Sainsbury’s told shareholders that total revenues increased by 4.1 per cent to £16.2 billion for the 28 weeks to 12 September, compared with a year earlier.
Sales from continuing operations, excluding fuel, were up 2.6 per cent, on the back of a 2.9 per cent rise in grocery sales to £13.2 billion for the period.
Meanwhile, Sainsbury’s saw general merchandise sales, which includes its Tu brand, slip 3.4 per cent due to reduced sales space in stores and a “subdued clothing market”.
However, fuel sales shot 17.8 per cent higher over the half-year due to the sharp jump in prices since the Iran war pushed up global oil prices.
The company reported underlying operating profit of £525 million, up 3.6 per cent, for the half-year.
It said it is now on track to deliver an underlying operating profit of between £1.025 billion and £1.065 billion for the year.
It had previously guided towards a range of between £975 million and £1.075 billion, but said this would now be the equivalent to between £965 million and £1.065 billion due to its proposed sale of Argos.
In July, Sainsbury’s agreed to sell Argos for at least £120 million to Swift Partners – a new company set up by retail experts including former Co-operative Group boss Richard Pennycook – around 10 years after buying the brand for £1.4 billion.
Mr Roberts said: “As we progress the sale of Argos and further sharpen our focus on food, we are building a simpler, more focused Sainsbury’s.
“With great value, outstanding quality and exciting new food across our ranges, we’re looking forward to helping customers enjoy a really special Christmas.”
The results also come on the back of reports that Sainsbury’s held talks with private equity-backed rival Morrisons – currently the sixth-largest grocer – earlier this year in a fresh attempt at consolidation.
The Financial Times reported the groups are no longer in talks but ignited fresh speculation that Sainsbury’s could see another major merger deal, after efforts to merge with Asda collapsed in 2019.
On Thursday, Mr Roberts said he “would comment on speculation”.