Don't Talk Ourselves Into Recession: UK Retail Giant
Sainsbury's, the UK supermarket group, has called on the British government to do everything possible to make the British consumer make good about themselves as the retail industry enters the crucial holiday season.
“We have to be careful not to talk ourselves into recession,” said Sainsbury’s commercial director Mike Coupe said in a CNBC first interview on Wednesday as the group unveiled forecast-beating underlying profits.
With the crucial holiday season coming up fast, Coupe said he was confident British consumers would not cut back for the big occasion as they had done for Halloween and bonfire night in recent weeks.
“Inevitably consumers are feeling the pinch, feeling the squeeze,” said Coupe.
Despite fragile consumer confidence, Coupe said Sainsbury’s had managed to pull off the 3 card trick of higher sales, higher profits and higher investment and was confident a marketing campaign highlighting their low “great value” products would keep people spending.
“The launch of our brand match promotion means you don’t need to shop anywhere else for branded goods,” said Coupe.
Sainsbury’s non-food business had continued to grow according to Coupe despite weakness for electrical sales.
Sainsbury’s stock is off by 18 percent over the last 12 months, significantly underperforming market leader Tesco, which has significant international operations. Coupe said he couldn’t comment on the share price but said he was confident the group would continue to grow.
Sainsbury’s H1 underlying profits rose by 6.6 percent to £354 million ($569 million) versus a Reuters expectation of £352 million.