When Sainsbury's updates the market on Tuesday it will continue to do so in the eye of the storm around alleged profiteering and sky-high food inflation.
Bosses of grocers have been under the microscope following claims of ‘greedflation’, with a report by the Competition and Markets Authority (CMA) into the matter also expected to be released next week.
While many investors will not give too much of a hoot, the market will be keeping a keen eye out in the first-quarter update for any indication that concerns around inflation are leading to profit margins tightening or whether inflation is beginning to ease.
Sainsbury's has been quick to defend its prices, having announced £15mln in grocery price cuts last week, with CEO Simon Roberts adding it “absolutely had not” been using inflation as an excuse to keep prices high.
In April, the FTSE 100-listed grocer reported annual profits that came in at the top of expectations at £690mln for the year to 4 March, albeit this was 5% below the same period a year earlier, with like-for-like sales were down 2.3% year-on-year and down 5.6% in the fourth quarter.
Sainsbury’s shares are trading no higher now than they did in spring 1989, analysts at AJ Bell pointed out, so investors are "clearly unconvinced" that the group can get the balance right between helping their customers out on price with the need to defend their own margins in the face of rising input costs.