Sainsbury’s will become the latest supermarket group to shed light on the impact soaring living costs are having on consumers with its first quarter results on Tuesday.
The business follows its larger rival Tesco, which last month revealed shoppers are changing spending habits in order to save cash.
Industry data also shows families are heading to the German discounters Lidl and Aldi in their droves as the cost of living crisis mounts.
Sainsbury’s has pledged £500m of investment over two years to cut the cost of essential items including milk, eggs, fruit and vegetables.
Boss Simon Roberts said customers are watching ‘every penny’ as supermarkets battle to be the lowest priced.
Hargreaves Lansdown equity analyst Matt Britzman said: ‘Any commentary on cost inflation on Tuesday will carry weight. It will be revealed whether the current strategy of raising prices after competitors is still viable. And, more importantly, what impact it’s likely to have on margins, should costs run higher than expected.’
Observers will be looking for any evidence of customers trading down to cheaper or own brand products, or cutting some purchases altogether. And overall sales will be in focus as the major grocers continue to lose customers to Lidl and Aldi.
Analysts will also pore over the details for any change to the grocer’s guidance from April that it expects profits for the year to next March between £630m and £690m.
Shares ended the week at 207.4p, down a quarter this year as fears mount over inflation.
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