If shoppers are savvy about it, most of the worst problems due to food inflation are able to be mitigated says Justin King, Sainsbury boss. Official figures show inflation at 4.5% while there are items up a great deal more than that. Fish is rising at a rate of 11% and booze by 10% while bread is soaring by 6%.
King says that the trend should not reverse itself anytime soon but says it is still possible to avoid the worst of the problems thanks to the competition that exists in the supermarket industry. We asked the question if it were possible to shop for 20 items this week that were cheaper than last year and the response was yes. He said they bought 23 items all major sellers where the prices were down from the previous year.
He said that Sainsbury’s feed a family for £50 campaign has been a huge success. What it has done is challenged two things in the minds of customers, firstly that eating fresh food is not cheap and second you have to shop at a discount store to save.
Sainsbury announced a 7% increase in sales for the last quarter and if petrol is taken out still a nice increase of over 4%. Like for like sales excluding new locations were up 2% which puts them easily in front of competitor Tesco.
The Basics range is the fastest growing brand at Sainsbury a clear indication that buyers are trying to cut down on money wherever possible. Kings says the business tries to hedge against increases in currency, grain markets and oil but it is impossible to completely protect itself of its shoppers from inevitable price increases. The pressure is still pointing upwards but the real question is for how long and how high.