Good progress for Sainsbury’s despite food deflation impact

Sainsbury’s has reported that it is making good progress despite “food deflation impacting many categories”.

Alongside the release today of its second quarter trading statement for the 16 weeks to September 26, the supermarket group indicated that its full-year profits are set to be better than expected.

As a result, Sainsbury’s is now expected to achieve full-year underlying profits of £548m. Despite being well below last year’s figure of £681m, this is still “moderately ahead” of analysts’ expectations.

Referring specifically to the Q2 results, Sainsbury’s chief executive, Mike Coupe (pictured above), said there had been an improvement in the group’s key trading metrics.

“Both volume and transactions grew as the decline in average basket spend in supermarkets continued to stabilise,” he said, adding that while the market is clearly still challenging, with food deflation impacting many categories, the group was making “good progress” on delivering its strategy.

“As we continue to reduce our promotional activity in favour of lower regular prices, we are improving the accuracy of our demand forecasting. This is driving better availability and lower than expected levels of waste.

“This also results in even better product freshness which supports our commitment to quality. Our customers are telling us that we are communicating our prices and promotions more clearly which, in combination with the price reductions we have made, has seen an increase in price satisfaction scores.”

Sainsbury’s has a 100% commitment to British pork, according to the latest Porkwatch figures, with its British rating for ham being 95% and sausages 86%.

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