// Shoppers have started buying for Christmas earlier than ever as they look to spread the cost
// Sainsbury’s CEO Simon Roberts said value will be crucial this Christmas
Consumers have started their Christmas shopping earlier than ever this year as people look to spread the cost amid surging living costs.
Sainsbury’s chief executive Simon Roberts said people were “buying little and often” as they plan for Christmas, and said that value will be more important than ever this festive period.
Roberts also pointed to the “marked move” in recent weeks of consumers eating more at home rather than dining out as a sign that Christmas trading should be robust at the grocery giant.
“That’s the reason that in our plans for Christmas we’re going to do as much as we can to really help customers beat the impact of inflation with great value in our offer,” he said.
“It’s a really tough time. Customers are watching every penny and every pound, but the work we’ve done on value has helped our customers see the strength of value in our offer.”
This golden quarter will have the unique feature of a World Cup, which kicks off in Qatar on 20 November.
Although the World Cup is usually a bumper period for both grocery retailers and Argos, with football fans snapping up new television, Roberts was lukewarm about the impact of the tournament.
“I’m not overly optimistic as people are watching their budgets. They’ll be managing the cost of the World Cup and will be thinking ahead to Christmas,” he said.
However, he vowed to have “the right offers and deals” for football fans as the event also coincides with Black Friday.
Roberts added: “We think people will spend more time at home watching the match, given the timing of the games. It’s all about helping people have a good time at home watching the game, with great value food from us.”
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Keeping prices low
Sainsbury’s unveiled a 8% fall in underlying pre-tax profit to £340 million over the half-year to September 17 this morning, despite sales edging up 4.4% to £16.4 billion.
The retailer had flagged at the beginning of its financial year that profits would fall as shoppers’ disposable income would be hit.
Its full-year profit guidance of £630 million to £690 million remained unchanged after it unveiled its results.
Roberts said its investment in keeping prices low had paid off and pointed to Nielsen data that showed it had passed on less inflation to customers than its rivals.
He said: “We will have invested more than £500 million by March 2023 in keeping prices lower by cutting our costs at a faster rate than our competitors, meaning we have more firepower to battle inflation.”
Roberts said price rises at Sainsbury’s fell below the 14.6% the Office for National Statistics found that food had surged in the year to September.
He said inflation at Sainsbury’s was “substantially lower” and “comfortably in the single digits”.
Although Roberts said that shopper’s baskets were becoming smaller as the cost-of-living crisis takes its toll on budgets, he added that Sainsbury’s was showing “more reliance” than its competitors.
“We’re seeing less switching to Aldi and Lidl than our competitors. Our basket sizes are holding up compared to all of our competitors and our customers are trading down less than our competitors too,” he said.