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Business
Apr 23, 2026
Analyzed by GPT OSS 120B

Sainsbury’s Flags Potential Profit Dip Amid Iran Conflict

AI Summary
Sainsbury’s warned that the escalating Iran conflict could shave its 2026 profit, despite a modest rise in annual earnings. The retailer now projects underlying profit between £975 m and £1.03 bn, while highlighting broader pressures on UK shoppers and the sector.

Sainsbury’s warns Middle‑East conflict could erode 2026 profit

Sainsbury’s announced that the war in Iran may depress its earnings this year as consumer budgets tighten and operating costs climb. The company said the impact on both customers and the business is "very uncertain" and reflected this uncertainty in its profit guidance.

Profit guidance and sales figures under pressure

The supermarket reported a 1.1% rise in annual profit to £1.03bn for the year ending 28 February, helped by the cessation of losses in its financial‑services arm. However, it now forecasts underlying profit of £975m‑£1.03bn, acknowledging that the war could push the result lower.

  • Annual sales grew 4.3% to almost £30bn.
  • Argos sales rose only 0.7%, constrained by pricing pressure and a shift to lower‑ticket items.
  • Roberts highlighted a 5% pay rise for colleagues and ongoing investment in price competitiveness.

Broader ripple effects on UK retail landscape

The conflict’s uncertainty is already affecting peers. WH Smith trimmed its profit outlook by about £10m, citing reduced passenger numbers and weaker consumer confidence. Sainsbury’s, the UK’s second‑largest supermarket, has maintained market‑share gains by keeping prices low despite cost inflation.

What the next 12 months could hold for Sainsbury’s

Management plans to open 10 new supermarkets and 20 new convenience stores this year, building on last year’s rollout of 10 supermarkets and 33 convenience sites. Increased automation, robotics, and an "AI centre of excellence" aim to boost supply‑chain efficiency and customer service, potentially offsetting some cost pressures.