UK supermarket group Sainsbury's has today warned 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 £975m and £1.075 billion for its 2026/27 year.
Sainsbury's made retail underlying profit of £1.025 billion 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 to any war-related slowdown in discretionary spending.
UK consumers are gloomier about the economy than at any time since records began in 1978, according to a survey published this week 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.
Shares in Sainsbury's have increased 39% over the last year.
