Sainsbury’s says shoppers are delaying spending in run-up to budget
The boss of Sainsbury’s has urged Rachel Reeves not to fuel inflation with tax rises on retailers and their suppliers and says shoppers are delaying spending in the lead-up to her budget later this month,Simon Roberts, the chief executive of the UK’s second biggest supermarket, which also owns Argos and Habitat, said his customers were “going to be cautious on discretionary spending, not least because of uncertainty out there and [household] budgets are tight”,He said Argos had launched its deals for the Black Friday promotional event earlier than last year to try to tempt out shoppers as it was seeing “some delayed spend” while households waited to see if they would have to pay more tax,Roberts said it was not clear if food price inflation had peaked, adding: “The inflationary pressures on cost base have been significant this year … What we don’t want to see [in the budget] is further impacts that may cause further inflation,“No one wants to see inflation go any higher.
”He pointed to a £140m increase in the retailer’s employers’ national insurance costs and new regulatory costs on packaging, which he said amounted to “tens of millions of pounds” and said “We have had to work really hard as an industry and a business at Sainsbury’s to contain those costs.”He said retailers had put forward their case to prevent additional business rates on large shops, which could affect many supermarkets.It came as ITV also warned of a hit from budget uncertainty, blaming weaker consumer and corporate confidence for a pre-Christmas slide in advertising revenue, predicting a 9% year on year fall in the key final quarter of the year.It announced plans to cut £35m more from costs this year, including by delaying some shows into 2026 and cutting marketing spending.Roberts spoke out about government tax plans as he revealed that Sainsbury’s is to open one supermarket a month over the next 18 months – its biggest expansion in more than a decade – as it upgraded annual profit hopes to more than £1bn.
Analysts from Shore Capital, Sainsbury’s broker, said it was upgrading profit expectations by £20m to £1.02bn, helping to push shares in the supermarket up by more than 6%, making it one of the top risers in the FTSE 100 on Thursday.The company also said it would be paying out a £250m special dividend to shareholders, after proceeds from the sale of its bank came in ahead of expectations at more than £400m.It also said it would spend a further £150m on buying back shares – another way of returning funds to investors.Asked why he was suggesting new taxes could fuel inflation while paying out more than £400m to shareholders, Roberts said Sainsbury’s had put £1bn into keeping prices down for shoppers over the past five years and £500m on increasing pay for workers.
“It is about making sure we get the equation right for all our stakeholders,” he said.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionDespite what it called a “highly competitive market”, the UK’s second largest grocer said it had increased market share as sales rose 4.8% to £15.6bn in the six months to 13 September, led by a 5.2% rise in grocery sales.
Pre-tax profits rose 5% to £271m in the half year after £69m of one-off costs mostly related to restructuring in its retail stores, including the closure of cafes and deli counters,The company said it had opened six supermarkets in the half year and would open another six supermarkets by the end of March and then 12 in the following year, its biggest investment in new stores for a decade,It also plans to open 30 convenience stores in the year to March and 28 in the following year,Sainsbury’s bought 13 former Homebase stores in 2024 followed by a number of Co-op outlets,The figures indicate a step up in the pace of grocery sales in the second quarter, as inflation has lifted and Sainsbury’s won market share, but also show a slowdown in sales growth at Argos.
Sainsbury’s said Argos’s performance was strong as a result of the warm summer and efforts to improve service and price, but its sales figures in the second quarter were up against a very busy period last year when it discounted heavily to clear stock after a cold summer.
Mistakenly released prisoner Billy Smith turns himself in
A fraudster mistakenly released from prison this week has handed himself back in as a hunt continues for a convicted sex offender who was also accidentally freed.While David Lammy, the justice secretary, insisted the government would clampdown on clerical errors, William Smith was filmed waving to cameras and hugging his partner before he walked back into HMP Wandsworth, in south-west London.Smith, 35, usually known as Billy, had been sentenced to 45 months for multiple fraud offences at Croydon crown court on Monday, but was then released in error by the prison.A clerical mistake by the court led to the prison being told it was a suspended sentence, which meant he no longer had to be detained. The court corrected the error but HMP Wandsworth was not informed
Overcrowding, understaffing and old IT: chaotic context to prison release errors
If anyone was surprised at the idea that a single prison could accidentally release two people within a matter of days, then a brief glimpse at an inspection report for HMP Wandsworth from last year would quickly explain things.Despite a high-profile escape from the south London jail only months earlier, conditions were so chaotic at the time of the inspection that most staff could not reliably say where all prisoners were during the day, Charlie Taylor, the chief inspector of prisons, reported with obvious near disbelief.“There was no reliable roll that could assure leaders that all prisoners were accounted for,” he wrote. After the escape of the spying suspect Daniel Khalife, who strapped himself to the underside of a delivery van, “it was unfathomable that leaders had not focused their attention on this area”, he said.As ever with the Prison Service, there is considerable context to this
Woman with stage 4 cancer has welfare benefit stopped after falling ill abroad
A woman with stage 4 colon cancer has had her universal credit payments stopped and is at risk of losing her home after she fell ill while visiting family abroad to tell them about her diagnosis.Ana Paula Cabral, 65, who moved to the UK from Portugal eight years ago, started receiving universal credit (UC) in July as she was unable to work after her cancer diagnosis, which required extensive chemotherapy.Her payments were abruptly stopped in September after she fell seriously ill while in Portugal, with the Department for Work and Pensions (DWP) saying she was no longer eligible as she had been out of the country for more than a month.With a significantly reduced income, Cabral said she feared she would lose her London home as she was unable to pay her rent and bills, which may mean she is forced to give up her job at a nearby homewares shop.“I’m supposed to pay the rent and all my bills but I am not going to be able to pay
England prison chiefs summoned to urgent meeting with ministers over wrongful releases
Prison governors in England have been summoned to an urgent meeting with ministers as the government comes under pressure over the wrongful release of two more prisoners, including a convicted foreign sex offender.Alex Davies-Jones, a justice minister, told broadcasters she was “furious” about the “unacceptable” situation where an average of 22 people are wrongly released from prisons each month in England and Wales.She said the “archaic” paper-based system within the prison service was partly to blame and that the government was introducing a “crack team” of digital experts to overhaul it.She said the “reams and reams of paperwork” led to situations where people who had the same name or many aliases were mixed up. She also pointed to the impact of chronic spending cuts to the criminal justice system
Latest mistaken releases expose deep cracks in England’s prison system
The mistaken release of a second foreign prisoner has forced ministers to re-evaluate their security and release procedures and will once again shine a spotlight on the well-documented problems at HMP Wandsworth.Much of the concern centres on poor technology and poor communication between prisons, the Ministry of Justice and the courts – the three bodies responsible for overseeing the movement of England and Wales’s 87,000 inmates.During the government’s emergency prison release scheme in September 2024 to tackle overcrowding, 37 inmates were freed in error after their offences were wrongly logged under repealed legislation.A computer system designed to automate the calculation of release dates has failed to function as planned, forcing prison staff to work out complex calculations by hand using calculators.With nearly 20% of prisoners being held on remand, increasing numbers are being transported between prison and courts for hearings
Resident doctors’ strike to go ahead after Wes Streeting’s last-ditch offer is rejected
Wes Streeting has failed in an attempt to end the long-running resident doctors’ dispute with a new offer to them, which means their five-day strike next week is expected to go ahead.The health secretary tabled a new offer to resident doctors – formerly junior doctors – in England on Wednesday in a move intended to avoid the strike, their 13th.But the British Medical Association’s resident doctors committee (RDC) rejected Streeting’s attempted olive branch and said his proposal was too limited for them to call off their action.Streeting pledged to double his previous offer to create 1,000 extra places for early-career doctors to move into specialist training in their chosen branch of medicine. Half of those 2,000 would be made available this year to help tackle a bottleneck in resident doctors becoming specialists, he said
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