Sainsbury’s has made underlying retail operating profits of more than £1bn for the first time but the British supermarket chain suggested it will not beat that this year as it battles with rivals on price.
UK supermarkets are locked in a battle for market share, trying to entice shoppers with lower prices – or trying to defend their turf against cheaper rivals.
Tesco, Marks & Spencer and Sainsbury’s share prices slumped last month after Asda said it would cut prices.
Sainsbury’s pre-tax profits rose 38.6% to £384m but underlying operating profit hit £1bn if one-off items, such as those related to the closure of cafes and hot food counters announced in January, were excluded.
If it is price cuts that are worrying British supermarket investors, price rises are the focus of the US Federal Reserve.
Jerome Powell, the Fed’s chair, said that Donald Trump’s tariffs were causing a “challenging scenario” for the central bank and were likely to increase inflation.
The Chinese online retailers Shein and Temu last night gave a clear indication of how tariffs will increase inflation: they said they will increase prices for US customers, although they did not say how much. Economists are expecting a big jump in the prices of the billions of dollars of goods imported from China in particular, after Trump raised tariffs on most products to 145%.
Powell’s comments caused US stock markets to drop last night.
The FTSE 100 is the worst of the European stock market performers this morning: it is down 0.6% in the early trades.
Germany’s Dax index is up 0.3%, while France’s Cac 40 is down 0.4%.
Across the indices, larger stocks are down, with the Euro Stoxx 50 down 0.2%.
The European Central Bank is expected to cut interest rates for the seventh time in a year later today in an effort to prop up the European economy, under pressure from the chaos across the Atlantic.
The agenda
• 1.15pm BST: European Central Bank interest rate decision
• 1.30pm BST: US initial jobless claims (week ending 12 April; previous 223,000; consensus 225,000)
• 1.45pm BST: ECB press conference with Christine Lagarde
We'll be tracking all the main events throughout the day … |
