Sainsbury's said geopolitical tensions and rising costs linked to the Iran war are creating uncertainty for both consumers and its profit outlook. The retailer flagged weaker discretionary spending, particularly in its Argos business, while maintaining cautious guidance for the year ahead.

Sainsbury's echoes Tesco warning as Iran war weighs on outlook

April 23, 2026

James Davey/Reuters

FILE PHOTO: A general view of Tesco, in Oldham, Britain, April 13, 2023.

Molly Darlington/Reuters

British supermarket group Sainsbury’s SBRY.L warned on Thursday that uncertainty around how the Iran war will affect consumers is clouding its outlook and could drag profits lower this year, echoing concerns voiced by market leader Tesco.

Sainsbury's, which has a 15.6% share of the UK grocery market, said the conflict in the Middle East will impact both its customers and its business.

"The duration and extent of these impacts is very uncertain and this is reflected in our profit guidance," it said, forecasting total underlying operating profit of between 975 million pounds and 1.075 billion pounds ($1.32-$1.45 billion) for its 2026/27 year.

GENERAL MERCHANDISE MARKET IS SUBDUED

Sainsbury's made retail underlying profit of 1.025 billion pounds in the year to February 28 2026, down 1.1% on 2024/25 but in line with guidance.

"We have made a positive start to the new financial year, with grocery volume growth ahead of the market. Argos trading continues to reflect a subdued general merchandise market," it said, adding it expected to continue to outperform the grocery market.

About one quarter of Sainsbury's sales are non-food, coming from its Argos general merchandise business, making it more exposed than Tesco TSCO.L to any war-related slowdown in discretionary spending.

British consumers are gloomier about the economy than at any time since records began in 1978, according to a survey published on Wednesday that showed the Iran war and soaring oil prices are taking a heavy toll on British households.

UK food inflation rose to 3.7% in March, according to official data. Trade body the Food and Drink Federation has warned food prices will be rising by almost 10% by December. Last week, Tesco said it did not recognise that number, as it warned its profit could fall this year as a result of the Iran war.

Sainsbury's like-for-like sales rose 3.1% in the fourth quarter of its 2025/26 year, having been up 3.4% in the third quarter.

Full year total retail sales, excluding VAT and fuel, rose 4.3% to 30 billion pounds.

Shares in Sainsbury's have increased 39% over the last year.

($1 = 0.7412 pounds)

UPDATE 3-Britain's Tesco says Iran war clouds profit outlook Read full story

-Reporting by James Davey; editing by Sarah Young/Reuters