Yahoo Finance Sainsbury’s lures back shoppers from Aldi and Lidl after price cuts
Sainsbury’s has said it is winning back customers from Aldi and Lidl as it prepares for a strong period of Christmas sales.
Britain’s second-biggest supermarket said it was regaining momentum in the battle against discount retailers, which was crucial as it heads into the festive period.
Given this boost, Sainsbury’s said it is now expecting to report full-year profits of between £670m and £700m in March.
It comes as the supermarket said it was starting to sell more groceries to shoppers as the cost of living crisis eases and prices come down.
Sainsbury’s said the volume of products sold in its grocery business was up from April to September, during which period pre-tax profits hit £275m - down from £376m a year ago.
Simon Roberts, chief executive of Sainsbury’s, said people were buying more in its stores as prices fell.
He said Sainsbury’s had spent £118m since March on lowering prices and swallowing cost increases, and was now attracting shoppers from all its competitors, including discounters Aldi and Lidl.
Mr Roberts said: “We know people are still finding things tough and we’re working harder than ever to reduce our costs, putting the money back into our customers’ pockets through lower prices on the products they buy most often.
“I’m pleased to say food inflation is coming down and we are passing savings on to customers.”
Figures from the British Retail Consortium earlier this week found that inflation hit a 14-month low in October, amid fierce price cutting between supermarkets.
The BRC data suggested that price rises dropped to 5.2pc in October, compared to 6.2pc in September.
Mr Roberts said: “As we head into this key trading period, we are encouraged by our strong momentum and we remain fully focused on delivering for customers and shareholders.”
Thursday’s figures revealed grocery sales were up 10.1pc in the first half of the year at Sainsbury’s. However, this was offset by weaker sales in its clothes division and the Tu brand.
Sales in Argos were up 3.3pc after it bulked up the range of products sold.
Overall revenues were up 3.5pc, excluding VAT but including fuel.
