Sainsbury’s boss Justin King this week hit out at the Government’s official inflation figures, saying they were giving a misleading view of the grocery market.

The Office for National Statistics this week claimed food inflation was at 6.6 per cent, but King said it had been running at 2 per cent at Sainsbury’s.

“The grocery market is growing at 4 per cent, so if inflation really was 6 per cent, that would mean actual volumes were down 2 per cent,” King told Retail Week. “That doesn’t pass the smell test.”

He said that because ONS measures prices on the shelf edge, rather than cash in the tills, it was failing to pick up on the benefit customers were getting from discounting. King said that 30 per cent of products being bought are on promotion, up from about 20 per cent a year ago.

“The data is not picking up the way in which the industry is responding to changing customer concerns,” he said.

King was speaking as Sainsbury’s revealed underlying pre-tax profit up 28 per cent to£488 million, while actual pre-tax profit was flat at£479 million. Sales were up 5.8 per cent, rising 3.9 per cent – excluding fuel – on a like-for-like basis.

The grocer unveiled plans for an online non-food offer to be launched next year. The plans come on the back of an expanded homewares range launched in two stores two weeks ago.

King refused to detail the range, but hinted it will reflect the clothing, homewares and health and beauty offer in the larger stores. He added that he had identified 50 stores that could be expanded to provide 10,000 to 12,000 sq ft dedicated to the Tu non-food range.

King also criticised the Competition Commission’s plans for an ombudsman, saying he saw no reason why multinational suppliers needed help from a regulator. “I don’t think the Cokes and Pepsis of this world need any help in their negotiations,” he said.

Key stats

Underlying pre-tax profit up 28%

Sales up 5.8%

Like-for-likes up 3.9%