The boss of Sainsbury’s has warned that pressure on household budgets “will only intensify over the remainder of the year” as he pledged to invest more money to improve value for shoppers.
Simon Roberts, chief executive of the supermarket group, said it is working to reduce costs across its operations amid continued inflation.
“We really understand how hard it is for millions of households right now and that’s why we are investing £500 million and doing everything we can to keep our prices low, especially on the products customers buy most often,” he said.
“The pressure on household budgets will only intensify over the remainder of the year and I am very clear that doing the right thing for our customers and colleagues will remain at the very top of our agenda.”
The chief executive, who took the top role in 2020, said more customers are switching to own-brand products in response to cost-of-living pressures.
“We have seen an increase in economy own-label lines, with strong rises for products like meat which we have matched against Aldi prices,” he said.
Mr Roberts added that the group’s general merchandise arms have seen sales of some “big ticket” items, such as furniture and technology, weighed down in recent months.
It came as the retail giant revealed that like-for-like sales, excluding fuel, declined by 4% over the 16 weeks to June 25, compared with the same period last year.
Sainsbury’s hailed a “good” performance in its grocery business, which saw sales dip 2.4% against levels from last year, which had benefited from pandemic restrictions on other parts of the retail sector.
The retailer said its “improved value position” has helped its performance against competitors, with the group investing heavily into improving prices, such as through its Sainsbury’s Quality, Aldi Price Match campaign.
Sales were also particularly strong around the Jubilee week, the company said, with sales of beers, wines and spirits at “the highest ever outside of Christmas and Easter, with Pimm’s, sparkling wine and champagne selling particularly well”.
The total sales decline was dragged lower by significant slumps in the group’s clothing and general merchandise divisions, which includes its Argos brand.
Argos sales fell by 10.5% over the period, which it said was driven by a heavy slump over the first five weeks.
The group also revealed that fuel sales jumped 48.3% over the period, driven by jumps in the price of both petrol and diesel.
Mr Roberts added: “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.
“The progress we are making on improving value, quality, innovation and service is reflected in our improved grocery volume market share.”
Shares in Sainsbury’s were 0.6% higher at 209.7p in early trading.