Sainsbury's, the UK's second-largest supermarket chain, has announced that food inflation is on the decline, thanks to an uptick in sales during bank holidays and warmer weather. Despite the challenges posed by rising food and drink prices, the company says itsobserved a return of sales volumes, with customers purchasing more items.
The latest figures from the Office for National Statistics (ONS) reveal that food inflation slightly eased in May but remained stubbornly high at 18.4 per cent.
According to Sainsbury's CEO, Simon Roberts, the chain has managed to keep its own prices at "less than half the headline rate" of food inflation.
He further stated that price increases are now stalling, as evidenced by falling prices on the retailer's 100 most popular products over the last quarter. Everyday items such as bread, butter, milk, pasta, and chicken have seen price cuts in recent months due to reduced costs in the supply chain, resulting in lower prices for consumers.
However, these developments come amidst an investigation by the UK's competition watchdog, which is examining allegations of supermarkets profiteering from high prices and whether reductions in wholesale prices are being passed on to the shelves quickly enough.
Sainsbury's recent financial report revealed a significant rise in grocery sales during the last quarter, with a growth rate of 11 per cent. This surge in demand was driven by customers buying more groceries, particularly during bank holidays and warmer weather towards the end of the quarter.
Supermarket boss Simon Roberts emphasised the company's commitment to battling inflation at a time when household budgets are facing immense pressure.
He said: “We are putting all of our energy and focus into battling inflation so that customers get the very best prices when they shop with us, particularly now as household budgets are under more pressure than ever.
“Food inflation is starting to fall and we are fully committed to passing on savings to our customers.
“Customers are choosing us when they want to celebrate and we grew ahead of the market over Easter, the Coronation and the bank holidays.”
In addition to strong grocery sales, Sainsbury's general merchandise business, which includes technology and white goods, saw a rise of 4 per cent with a particularly impressive performance from its Argos operation, which recorded a 5.1 per cent increase.
The announcement from Sainsbury's comes shortly after the Competition and Markets Authority (CMA) watchdog revealed that supermarket customers paid nearly £1 billion more for fuel in 2021 due to increased margins. Responding to this, Mr. Roberts expressed support for the CMA's proposals to enhance transparency in fuel prices.
He said: "We will always be the cheapest or second cheapest for fuel in any location."
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