Q1 likeforlike sales up 9.8
Says has returned to volume growth
Keeps profit guidance for the full year

LONDON, July 4 Reuters Sainsbury39;s, Britain39;s second largest supermarket group, said on Tuesday food inflation was starting to fall as it reported a 9.8 rise in underlying sales in its latest quarter and a return to volume growth.

The group, which has a 15 share of Britain39;s grocery market, also maintained its financial guidance for the full 202324 year underlying pretax profit between 640 and 700 million pounds 812888 million versus 690 million pounds made in 202223.

Trading conditions in the 16 weeks to June 24, its fiscal first quarter, were dominated by stubbornly high inflation, which has become a major political issue in Britain, outstripping pay growth at a time of rising interest rates, putting household budgets under strain.

Food and drink inflation was 18.3 in May according to the most recent official data, and 14.6 in June according to the most recent industry data.

Food inflation is starting to fall and we are fully committed to passing on savings to our customers, Sainsbury39;s chief executive Simon Roberts said, pointing to investment of 60 million pounds in lower prices since March.

Prices on our top 100 selling products are now lower than they were in March, against a market where prices have gone up, he said.

Grocery sales rose 11.0 in the quarter, and general merchandise sales were up 4.0. However, clothing sales fell 3.7….