Sainsbury’s finance chief warns food prices will continue to rise

Shapland said that Sainsbury’s food inflation for the 12 weeks to March 22 was “just above 2 per cent, which is a bit more than we saw in the third quarter”.

He added: “A lot of that has been driven by the commodity prices of bread and meat and we would still expect to see inflation in that quantum in the next couple of quarters.”

Rising food prices are a factor in driving the slowdown in consumer spending, prompting shoppers to keep a tighter hold on purse strings. However, Shapland said food price inflation was being countered by promotions.

Sainsbury’s posted like-for-like sales up 4.1 per cent, excluding fuel, for the 12-week period, which was its 13th consecutive quarter of growth.

Shapland said a key driver was sales of non-food, “which is growing three times the rate of food”.

Shapland said that Sainsbury’s heavy investment in its non-food operation is paying off and that clothing, electricals, home and lifestyle categories registered “good growth” over the period.

The grocer also unveiled a£1.2 billion property joint venture with British Land on 38 stores. “It is a very significant deal – it is 8 per cent of our trading space,” said Shapland.

He said the venture will enable Sainsbury’s to invest more heavily in bigger store extensions and extend non-food space.

Sainsbury’s also plans to add 100 stores to its convenience arm over the next three years.

Former Tesco director Dido Harding will join Sainsbury’s operating board this spring as convenience director.