Sainsbury’s has warned that the conflict involving Iran could put fresh pressure on both customers and retailers, making it one of the more closely watched UK business stories this week. Reuters reported on 23 April that the supermarket expects the crisis to affect consumer spending as well as its own operations, even though it said it had made a positive start to the new financial year.

The company said its retail underlying profit for 2025/26 fell by 1.1%, and its shares dropped after the update. Reuters noted that Sainsbury’s warning echoed similar caution from Tesco, suggesting concern is spreading across the supermarket sector rather than being limited to one chain.

What makes the story more important is the wider economic backdrop. Rising energy costs linked to the Iran conflict have already pushed UK inflation higher, with Reuters reporting this week that annual inflation rose to 3.3% in March from 3.0% in February. That helps explain why big retailers are sounding more careful again about the outlook for household budgets.

For UK readers, this is more than a company update. It is another sign that the cost-of-living story has not gone away, and that supermarkets are preparing for a tougher environment if higher fuel and energy prices continue to feed through into everyday spending.