Sainsbury’s chief executive Simon Roberts said: “We’re in the strongest position we’ve ever been [on price competition] and we intend to stay there.”
Sainsbury’s expects the impact of lowering prices to be relatively small. It predicts underlying retail profit will tick down by around £36m over the year.
This is far below the potential £400m hit announced by Tesco.
Sainsbury’s set out its expectations as it revealed that full-year sales rose by 3.1% to £31.5bn. Pre-tax profit jumped from £277m to £384m.
While revenue at Sainsbury’s grew strongly over the 12 months to 1 March, sales continued to fall at Argos although it said that the situation improved as it boosted traffic to the brand’s website.
The supermarket also reported an 8.9% drop in fuel sales to £4.7bn. It blamed “reduced demand” as well as the lower cost of petrol and diesel due to “falling commodity prices in a highly competitive market”.
Official data released on Wednesday showed that the falling cost of motor fuel helped drive down the overall rate of inflation.
Inflation eased by more than expected to 2.6% in the year to March, from 2.8% in February.
