Sainsbury’s chief executive Justin King has said he does not believe the consumer trend towards cutting back on spending will affect sales at the supermarket chain.
In an interview with This is Money, King said he believes deferrable purchases such as furniture and eating out will be the first to go, instead of food expenditure, and consumers will also begin to analyse their use of energy.
“For most families, food isn’t a very productive place to look if you are trying to cut spending,” he said. “If you find yourself compromising on food, it’s something you notice every day, and I don’t think people want to be reminded every day that they are worse off than a year ago.”
King says the amount of money an average household spends on groceries stands for only nine per cent of monthly expenses, and that figure has been relatively static over the last few years.
Even the news last week that discounters such as Aldi and Lidl are growing sales faster than any other supermarket has failed to deter King, who believes consumers care more than ever about the food they eat.
“Let’s be clear, we are not in a time of recession,” he told This is Money. “But thing are getting tighter, and people are changing the way they shop to duck the issue.”
Store promotions are growing in popularity, said King, and more customers are engaging in what he refers to as ‘top and bottom’ shopping.
“People are buying more products like cheese and eggs - basic cooking ingredients - but then splashing out a bit where taste is really important, such as with tomatoes or free-range chicken,” he added.
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