Sainsbury’s boss issues warning to John Healey ahead of Budget as households brace for rising costs

“I think this Government is listening to business,” he said. “We’ve had the opportunity to meet with figures from Government and stress that it is really important we don’t see a repeat from previous budgets.”

Mr Roberts urged the Chancellor to steer clear of significant increases to business taxes and labour costs, warning that previous Labour budgets had already placed considerable strain on retailers.

The Food and Drink Federation’s forecasts saw food inflation topping nine per cent by the end of the year, but prices were unchanged at 1.3 per cent in the year to September, according to figures from the Office for National Statistics.

The supermarket executive urged the Government to bring about positive reform to the business rate tax system, help encourage businesses to hire, and increase capacity rules linked to farming investments.

Mr Roberts also highlighted the ongoing squeeze on shoppers, cautioning that “many households are finding things tough at the moment” as consumer budgets remain under pressure.

Sainsbury’s said its pricing initiatives had helped attract greater numbers of customers during a difficult period.

The London-based retailer pointed to its Nectar Prices loyalty scheme and its Aldi Price Match programme as tools that have proved effective in drawing shoppers through its doors.

The supermarket group delivered an improved set of half-year results on Thursday, with total revenues climbing 4.1 per cent to £16.2billion for the 28 weeks to September 12.

Grocery sales proved particularly strong, rising 2.9 per cent to £13.2billion as customers bought greater volumes of products while price inflation eased.

Underlying operating profit for the period reached £525million, a 3.6 per cent increase on the previous year. Sainsbury’s also upgraded its full-year profit forecast, saying it now expects underlying operating profit of between £1.025billion and £1.065billion.

General merchandise, including the Tu clothing brand, fell 3.4 per cent owing to reduced store space and what the company called a “subdued clothing market”.

Fuel sales, by contrast, surged 17.8 per cent as the Iran war drove up global oil prices.

Sainsbury’s agreed in July to offload Argos to Swift Partners, a firm established by retail veterans including former Co-operative Group chief executive Richard Pennycook, for a minimum of £120million.

The sale comes roughly a decade after Sainsbury’s acquired the brand for £1.4billion.

The disposal forms part of Mr Roberts’s strategy to strip back the business and concentrate on its core grocery offering. The company had previously forecast full-year underlying operating profit of between £975million and £1.075billion, but said this range would now equate to £965million to £1.065billion once the Argos sale is accounted for.

“As we progress the sale of Argos and further sharpen our focus on food, we are building a simpler, more focused Sainsbury’s,” Mr Roberts said. “We’re looking forward to helping customers enjoy a really special Christmas.”

The half-year results also arrived amid reports that Sainsbury’s had held discussions with Morrisons, the private equity-backed supermarket chain currently ranked as Britain’s sixth largest grocer, about a potential merger earlier this year.

According to the Financial Times, those talks have since ended. The reports nonetheless reignited speculation about consolidation in the grocery sector, seven years after Mr Roberts’s predecessor saw an attempted merger with Asda blocked by competition regulators in 2019.

Mr Roberts declined to be drawn on the matter on Thursday, saying he “would comment on speculation”.

Sales from continuing operations, excluding fuel, rose 2.6 per cent across the half-year period, suggesting the retailer’s food-first strategy is gaining traction even as the broader retail landscape remains challenging.