Sainsbury's says price war and rising wage costs will hit profits

Sainsbury's has warned that profits are not likely to rise this year as it braces for an expected price war among supermarkets and faces rising costs from higher wages.

- Sarah Butler

The group joined Tesco, Next and Marks & Spencer as one of a handful of retailers who have made £1bn in profits in the year to 1 March, but it does not expect to beat that figure this year despite plans to cut costs with more automation and warehouse closures.

Simon Roberts, the chief executive of Sainsbury's, indicated that the group was ready to take on Asda, which has pledged to cut prices in an attempt to win back market share.

Roberts said his business was "committed, above all else, to sustaining the strong competitive position we have built - consistently giving customers the great value they have come to expect".