Sainsbury’s has warned that the war in the Middle East will “impact both our customers and our business” and said profits could fall this year as a result.
The UK’s second largest grocery chain echoed the cautious message delivered last week by largest rival Tesco.
Sainsbury’s chief executive Simon Roberts said there “will be pressure on food prices” amid fears that the impact of the conflict on energy prices will drive up the cost of food production.
Industry group the Food and Drink Federation warned that food inflation could soar above 9% this year because of the crisis.
Mr Roberts called for the Government to provide energy support for the food sector as a result, asking for a support scheme for energy-intensive industries to be extended to food producers and manufacturers.
“The single biggest thing the Government can do is make sure they provide all the support they can to help with the cost of energy,” he told reporters.
“The UK growing season is in full swing and the products we will be growing here result in a lot of energy.
“It means there are particular price pressures in fresh food with regards to energy, so it is important for those energy costs to be mitigated.”
Mr Roberts said shoppers have become “even more focused on the cost of living” since the conflict started at the end of February.
He stressed that the retailer is committed to ensuring customers get “the best possible value” as a result.
The retailer said it expects an impact from the conflict but that the duration and extent of this remains “very uncertain”.
It said it expects to deliver underlying operating profits of between £975 million and £1.075 billion for the current financial year.
This came as Sainsbury’s told shareholders that it reported a £1.025 billion underlying operating profit for the year to February 28, down 1.1% on the previous year.
Meanwhile, pre-tax profits jumped by 55.3% to £393 million for the year.
The retailer also revealed that group revenues, excluding VAT, rose by 2.7% to £33.6 billion for the year.
Retail sales, excluding fuel, were up 4.3% for the year, boosted by a 5.2% rise in grocery sales on the back of strong volume growth.
It also reported that sales in its Argos business grew by 0.7% to £4.1 billion for the year.
Mr Roberts said: “More and more customers are choosing Sainsbury’s for more of their shopping, trusting us to deliver great value day in, day out.
“The conflict in the Middle East means customers are even more focused on the cost of living and we are absolutely committed to making sure everyone gets the best possible value when they shop with us.”
