Sainsbury's says grocery inflation 'starting to fall' as sales rise

Sainsbury 's said food inflation is 'beginning to drop' as the supermarket group recorded a sales increase due to holiday and warmer weather.

"Strong guidance has been maintained on retail free cash flow, which should bode well for tackling other issues outside the purview of this trade statement, such as reducing net debt ." - Richard Hunter

The UK's second-biggest grocery chain also said sales had rebounded last year with shoppers purchasing more items amid strong pressures from runaway food and beverage inflation.

The latest official figures from the Office for National Statistics (ONS) show foodstuff inflation narrowed slightly in May but persisted at a stubbornly high 18.4%.

"Food inflation is starting to fall and we are fully committed to passing on savings to our customers," - Simon Roberts (businessman)

"Combination of great value and some good weather in recent weeks means we have grown our food volumes and market share" - Simon Roberts

Products such as bread, butter, milk, noodles and chicken have seen price reductions in recent months as price rises are passed on to customers further down the supply chain.

Nonetheless, this comes amid an ongoing UK competition watchdog inquiry into claims the supermarkets benefit from higher prices and whether lower wholesale prices are appearing on the shelves fast enough.

On Tuesday Sainsbury's saw a bigger jump in food sales last quarter as shoppers sought higher-priced goods.

It said that during the 16 weeks to June 24, retail sales excluding fuel rose by 9.8% from corresponding period last year.

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