Cost of living crisis will get worse before it gets better, warns Sainsbury’s boss as it doubles down on price cutting
- Sainsbury’s chief executive said customers were facing the ‘toughest of times’
- Supermarket ploughing £500m into slashing cost of essential items
- Other major grocers pledge to focus on keeping weekly shop affordable
Sainsbury’s boss Simon Roberts has warned that the cost of living crisis will get worse before it gets better.
The chief executive said customers were facing the ‘toughest of times’, adding: ‘The effects of this are going to last longer than I am sure most people expected months ago.
‘The price of food, fuel, fertiliser and labour have all gone up. We are seeing substantial cost impacts and they are not going to go away tomorrow.
Helping hand: Sainsbury’s is ploughing £500m into slashing the cost of essential items including milk, eggs, meat, fish, fruit and vegetables
‘Households up and down the country are facing real challenges. It is challenging for customers and challenging for households trying to manage their budgets.’
His warning came as Sainsbury’s doubled down on a price-cutting spree.
The grocer is ploughing £500m into slashing the cost of essential items including milk, eggs, meat, fish, fruit and vegetables. Roberts said: ‘Customers are watching everything they are spending.
‘We have to work hard to make sure we hold back as much of the impact from customers as possible.’
But he said factors including the rising costs of staff, fuel, fertiliser and production ‘take time to work through’.
His comments came a week after former Marks & Spencer boss Steve Rowe warned that shoppers will rein in spending this autumn in response to the cost of living squeeze.
Other major grocers have pledged to focus on keeping the weekly shop affordable for families grappling with spiralling inflation and energy bills.
Asda has ploughed £90m into expanding its Just Essentials range and placing a price lock on more than 100 of its bestselling items for the remainder of the year.
Tesco has added 100 products in the past month to its Low Everyday Prices range while expanding its Aldi price match to compete with the German discounter. Data firm Kantar said last week that grocery prices were rising at their fastest rate for 13 years, jumping 7 per cent in the past year.
In a sign that customers are looking for deals, Aldi and Lidl were the only grocers to increase sales in the three months to May 15 – by 5.8 per cent and 6 per cent respectively.
With 14.8 per cent of the market, Sainsbury’s comes in at No2 after Tesco – although, jointly, Lidl and Aldi beat it with a record 15.9.
The pressure on consumers is only set to increase after regulator Ofgem warned that average energy bills would go up by another £800 in the autumn to £2,800.
Roberts said: ‘The biggest thing customers are telling us right now is all about the cost of living.
‘Everything we are doing is relentlessly about trying to get our prices in the best place we can.’