Simon Roberts, Chief Executive of Britain’s second-largest supermarket chain, has issued a warning to the government, urging caution over tax rises for retailers and suppliers ahead of the upcoming budget. Meanwhile, the company announced a stronger profit outlook and an ambitious store expansion plan.
Roberts said that many households are “holding back” on discretionary purchases as they face uncertainty and tight budgets. He noted that while food remains essential spending, other purchases are being delayed by shoppers, a trend his firm has observed in recent weeks. Against this backdrop he called on the Chancellor Rachel Reeves to avoid imposing additional burdens on the retail sector. For Sainsbury’s, the cost base is already under pressure: the business has absorbed a roughly £140 million rise in national insurance employer contributions, and Mr Roberts said the company is also tackling “tens of millions” of extra costs due to new packaging-regulation rules. He stressed: “What we don’t want to see… is further impacts that may cause inflation to go any higher.” The Guardian
On the brighter side, Sainsbury’s also revealed that its profit expectations have been lifted: the firm now anticipates underlying operating profit for the year ending March 2026 of more than £1 billion, following solid first-half performance. The retailer’s market share in the UK has climbed to 15.3 %. London South East+1
To support growth, Sainsbury’s is embarking on its biggest expansion drive in more than a decade: it plans to open one new supermarket each month over the next 18 months. That pace signals confidence in its growth strategy even as shoppers remain cautious. The Guardian
Why this matters.
The supermarket sector is balancing two opposing forces: on one hand rising costs (labour, regulation, packaging) are squeezing margins; on the other hand, consumer spending is showing caution, especially for non-essential items. For Sainsbury’s to upgrade its profit guidance and still push ahead with expansion suggests the company believes it can navigate the pressure. But the public plea to the government highlights how closely retail cost pressures tie into broader economic policy and inflation dynamics.
What to watch.
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Whether the government responds to retailer concerns in the upcoming budget, especially in areas of employer taxes and business regulation.
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How Sainsbury’s new stores perform in a challenging consumer-spend environment.
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Whether the heavy cost headwinds will force further price inflation, in turn affecting shopper behaviour.