Sainsbury’s CEO Simon Roberts pressed the UK government to avoid added business taxes and labor costs before its Oct. 28 Budget, as the grocer updated its annual profit outlook.
Roberts called on ministers to hold off on additional business-tax and labor-cost increases, The Independent reported. He also sought a revamp of business rates and steps to encourage employers to hire. Roberts called for rules to provide more capacity for investment in farming. The Independent said he described the government as “listening” after talks with officials at No. 11 Downing Street the previous week. Roberts told the newspaper, “Many households are finding things tough at the moment.”
The appeal accompanied results showing stronger sales in Sainsbury’s grocery division. The company said revenue for the 28 weeks ending Sept. 12 reached £16.2 billion, a 4.1% increase from a year earlier. Grocery sales rose 2.9% to £13.2 billion, while sales from continuing operations excluding fuel grew 2.6%. Sainsbury’s said shoppers purchased more goods by volume as price increases eased. Underlying operating profit was £525 million, up 3.6%.
The retailer now expects full-year underlying operating profit of £1.025 billion to £1.065 billion. Its previous guidance was £975 million to £1.075 billion; reflecting the proposed Argos sale, the updated forecast is equivalent to £965 million to £1.065 billion. Sainsbury’s agreed in July to sell Argos to Swift Partners for at least £120 million, about a decade after it bought the brand for £1.4 billion.
Sainsbury’s cited its Nectar Prices loyalty offers and Aldi Price Match scheme among the factors drawing customers to its stores. The results extend earlier coverage of Sainsbury’s Oct. 22 update, which examined the retailer’s grocery strategy. The Budget is scheduled for Oct. 28.
