LONDON — Sainsbury’s warned that the pound’s weakness since the Brexit vote could push up food prices, as it posted a drop in sales in the first nine weeks of the year.
Britain’s second-largest supermarket chain recorded a 0.5% drop in like-for-like supermarket sales, excluding fuel, in the three months to 11 March.
“The market remains very competitive and the impact of cost price pressures remains uncertain,” said Mike Coupe, Sainsbury’s chief executive.
The UK’s food retailers are facing significantly higher import costs as a result of the pound’s drop in value since the June vote, as well as some rising commodity prices.
According to consultancy Kantar, food inflation doubled in February to 1.4%, as the price of staples like dairy and meat rose sharply.
However, a 4.3% growth in like-for-like sales at Argos — the catalogue retailer which Sainsbury’s acquired last year — helped to offset the supermarket’s decline. Combined Sainsbury’s and Argos sales, excluding fuel, at stores open at least a year, were up 0.3%.
Coupe said: “We are pleased with this performance and are making good progress against our key priorities.”
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