Simon Roberts, chief executive of Sainsbury's, has urged the government to help ease rising energy costs for farmers, food producers and retailers resulting from the conflict in the Middle East, warning that failure to do so could lead to further food price rises.
Mr Roberts said the single most effective step the government could take to keep prices down would be to ensure energy prices for the industry do not rise faster. He called for the expansion of support on energy bills for food-related businesses, similar to reliefs already announced for other energy-intensive sectors.
Sainsbury's reported a 1.1% increase in annual underlying profits to £1.03bn for the year to 28 February, but warned that profits could fall in the current year due to uncertainty from the Iran conflict. The company forecast underlying profit of between £975m and £1.08bn, reflecting the unpredictable impact on customer budgets and business costs.
The grocer said the conflict would affect both customers and its business, with lower consumer confidence and squeezed budgets. Shares in Sainsbury's fell 3.7% following the profit warning.
The impact of the Middle East conflict is also evident at WH Smith, which cut its profit forecast for the year ahead by about £10m to £90m-£105m, citing uncertainty from the conflict and its effect on passenger numbers and consumer confidence.
Mr Roberts noted that the UK's growing season helps with food availability, but warned that energy costs for heating polytunnels, transporting food and running refrigerators remain a major pressure on inflation and food prices.
