Sainsbury’s has revealed a dip in profits as the supermarket group swallowed some of the impact of soaring costs.
Nevertheless, the retailer said it is well-placed for the key Christmas period after strengthening trade over the latest quarter.
Sainsbury’s, which also owns Argos, said underlying pre-tax profit declined by 8% to £340 million over the half-year to September 17, compared with the same period last year.
The company has said profits for the current year are set to decline as it chooses to invest more into its pricing and pay improvements for workers.
The retail group also revealed that total revenues jumped 4.4% to £16.4 billion over the half-year, compared with the same period last year.
Like-for-like sales, excluding fuel, slipped by 0.8% over the six-month period after declining against pandemic-boosted figures at the start of the period.
However, the group said it saw a 3.7% rise in like-for-likes sale over the past quarter as its grocery business witnessed accelerating inflation and a benefit from warm summer weather.
The group said it has benefited from investment to help swallow cost inflation for key products and keep pricing lower for customers, with £500 million to be invested in pricing.
Sainsbury’s said it is “well placed through the peak trading period and into next financial year to support customers as they manage further cost-of-living pressures”.
The group is halfway through a £1.3 billion cost-saving programme which has seen it shut down in-store restaurants and standalone Argos shops.
It said it expects to close around 50 Argos stores this year as part of the previously announced plans, with around 25 Argos sites set to open within larger Sainsbury’s shops.
Simon Roberts, chief executive of Sainsbury’s, said: “We really get how tough it is for millions of households right now.
“Customers are watching every penny and every pound and we know that they are relying on us to keep food prices as low as we can.”