Hello, and welcome to Sainsbury's Q1 trading statement 2022-2023 analyst Q&A call. On the call this morning is Simon Roberts, Chief Executive Officer, and Kevin O'Byrne, Chief Financial Officer. I will now hand you over to CEO Simon Roberts for the presentation. Well, thank you. Good morning, everyone. Thank you for joining Kevin and I this morning to talk about our quarter one trading statement covering the 16 weeks to the 25th of June. I'm gonna give you a brief summary of our performance first with a few slides, and then, of course, we'll be happy to take all your questions. Clearly the environment out there is tough. Tough for customers, tough for suppliers, and as a result, we are taking necessary but tough decisions on costs, on prices, and clearly on our priorities too. The key point I want to make here is that we are very focused on delivering against our strategy for the long term and on further building momentum in each of these areas which are critical for this year ahead. Nearly two years into our plan now, we believe that we are well-placed to navigate in this environment given the progress we're making. Looking first at our numbers. Well, I'm pleased with the performance we've delivered, but importantly also how we've delivered that performance through the first quarter of this year. We're trading in line with expectations, and there is no change to the outlook we set back in April. It's important to remember that the first five weeks of our trading period was against a lockdown last year. Year-on-year grocery sales declined, but as you can see, we were significantly ahead of pre-pandemic levels. Through the first part of the quarter last year, the closure of non-essential retail particularly impacted Argos, Sainsbury's general merchandise and clothing year-on-year numbers. To unpack a little of what this means, Argos sales were down 19% in the first five weeks, but down 7% for the remainder of the quarter once we passed that lockdown anniversary. As expected, we're seeing customers spending less across some categories. But we've also seen encouraging GM market share performance in that context, with market share gains through the quarter in a number of categories. Fuel sales were 27% higher through the quarter than pre-pandemic levels. Turning to this next slide, we show you the same volume market share metrics each time we report. We were only slightly behind the market on a year-on-year basis against what was a strong outperformance in the same period last year. We're pleased with this, and we're pleased too with our continued progress in putting food first. Customers are recognizing our improved value, and they're choosing us for the big occasions like the Jubilee. We also performed well through the key events in the quarter, Easter, May Bank Holiday, Mother's Day, and Father's Day. As you can see here, importantly, we're holding on to the market share gains that we have made versus the pre-pandemic levels. On this slide, we've given some further context as to what's going on across the grocery business in each of our channels. As you can see, supermarket basket sizes have settled at a higher level than the pre-pandemic. You can also see supermarket transactions have continued to recover as some customers switch out of online and return to our stores. Online sales are still broadly, though, double pre-pandemic levels. This normalization of customer behavior is also driving continued recovery of our convenience sales, as you can see on the right-hand chart. Now, we are seeing some signs of customers changing behavior in response to the cost of living crisis, but it is also hard to untangle these effects from the COVID normalization we're also seeing. We're seeing some switching into economy own label, but premium is remaining resilient, and Taste the Difference is performing strongly. Clearly, in general merchandise, demand is challenged and will continue to be, especially across big-ticket items. We have factored this into our forecasts. As we said, we would focus on value and competitiveness at the center of the plate. That's the absolute core of our strategy. We have further invested in this with Aldi Price Match, and we're now matching Aldi on the 20 highest volume lines which customers buy most often. In taking a step back at what's happening here, I think we are really well-placed to respond to the changes we're seeing in customer behavior. Most importantly, we're listening closer than ever to our customers so that we can be agile and adapt faster in our response and in our forward planning. As you know, we set course 18 months ago to be much more competitive. This is working for us and clearly is now more important than ever. We also have a customer base that expects great value for money, but also one that is prepared to trade up into premium. We have a breadth of assortment and brands across our offer, together with a service proposition that are differentiated and our customers are continuing to value. Now on this next slide, you'll be familiar with these two important charts. We're continuing to inflate behind the market by 1%-2% overall, and particularly, as you can see here, on the items that customers buy most often. We are seeing more spend from secondary customers, those who are shopping around more, and continuing to see growth from these customers. Being more competitive is the driver of our improved performance. Our value index to Aldi has improved over 350 basis points year-on-year. The three core value programs, the Sainsbury's Quality, Aldi Price Match, our Price Lock, and investing at the center of the plate is absolutely core to our value strategy. These three platforms are underpinned by Nectar Prices, which is personalized value for customers, and that's really working for us. Also in the quarter, we moved the number of digital Nectar users to 9.6 million, and so gaining further momentum there, too. Now moving on to this next slide, we've also seen customers choosing Sainsbury's for the key events during the quarter. This is really reflecting the work we've been doing, both on improving innovation and quality. Through the Jubilee, we outperformed the market by nearly 2%. Strong Taste the Difference performance came through as customers really bought into our premium ranges, and we were 12% up on Taste the Difference through the Jubilee. Innovation is an absolute key of our focus, and we'll launch around 350 new Taste the Difference products this year. We also saw our biggest ever beers, wines and spirits sales outside of Christmas and Easter through the Jubilee. We have more than 200 new summer edition products launched for this year. We've gone big on barbecue with our biggest ever range, so we're well set for the summer and hopefully some warm and hot weather coming soon. Now, I said earlier that we're seeing customers spending more cautiously on general merchandise and clothing, as we expected. We are pleased that we're taking our fair share of the spend that is out there, and we're gaining share in some key categories like consumer electronics, technology, household and gardening. This chart shows the difference in the year-on-year growth, initially against the period of lockdown closure last year in the first five weeks, and then as we annualize that in the second 11 weeks of the quarter. We continue to be cautious on customer spending, but also confident that there will be some offset to this, both on the top line, where customers are seeing better availability, and on the cost base, where the Argos transformation program continues at pace, and we're on plan in delivering the expected benefits. We guided to year-end to expect high single-digit volume declines at Argos, and we're still comfortable with that guidance. Of course, it's still relatively early in the year, given the weighting of GM sales to the second half. Now on this final slide, I just want to come back to our key priorities we set out now nearly two years ago. This is our plan. We're delivering against the five key priorities, and they're more important now than ever in the current environment, with a real focus on putting food first, our brands that deliver, and save to invest. We're maintaining a really sharp focus on innovation, on service, and above all else, value. We're very focused on strong execution and continuing to be agile as we move at pace. We're delivering and supporting this with a very focused program of delivering structural cost savings, as we've talked with you about before. We believe this puts us in a strong relative position to our competitors to navigate in this environment. To conclude before questions, quarter one sales have been in line. We're on track to deliver the guidance we set out in April, and we've been pleased with our market share performance. Of course, it’s not easy out there, and we still have a lot to deliver this year, but we’re well-placed, and as a team, we’re very focused on delivering our plan. I just wanna thank my colleagues and all of our suppliers for all of their hard work in the quarter and everything that they’re continuing to do to support our business and to do the best job we can for our customers. Thank you for listening. I’m now gonna hand back to our moderator, and we’ll open up the call for your questions. Thank you. Thank you. We will now take questions from the chosen analysts. If you would like to ask a question, please use the reactions button at the bottom of your screen and use the raise hand function. When asking a question, please turn your camera on and unmute yourself. Our first question comes from Andrew Gwynn, BNP Paribas. Good morning, Andrew. Morning, Andrew. Hi there. Good morning. How are we doing? Hopefully, you can see me emerging from the darkness by the look of it. A little bit. First question for you, Kevin. Obviously. Absolutely. Yeah, I think I'm coming through now. Here we go. First question for you, Kevin. Obviously, an announcement that you intend to retire, thankfully with us for a few months yet, but just wondering, can you put some context around that? It's obviously a very difficult year, but maybe just overlay your thoughts. Second question, you mentioned the trading around, but also actually the uplift in spend with secondary shoppers. Sainsbury's a net benefactor from the shopping around. Thank you very much. Thank you, Andrew. Yeah, just I'll take the first one. Yeah, I mean, look, it was always gonna be a hard decision when to decide to retire, and it's been a real privilege working for Sainsbury's and having this role. When the time comes, you know, I will be 58. I'll have done not far off 30 years of these types of jobs, six years at Sainsbury's and had the pleasure of three years since Simon was announced as CEO and working together. It's the right time personally for a change. The big news, and I'm really delighted, is that we've made an internal appointment with Bláthnaid Bergin taking on the role. Bláthnaid is just, you know, a very strong contributor to the business right now, will be an excellent CFO. By the way, Andrew, if you need any advice on pronouncing Bláthnaid's name, I'm available for one-to-one coaching. Thank you very much. Yeah, no, I did ask James earlier, but, yeah, on the trading round. Sorry, Simon. Yeah, no. I mean, just, you know, just to emphasize the point, you know, great to be able to appoint an internal successor. Look, Kevin and I have got plenty to do, haven't we, Kevin, over the next nine months in the balance of this year. Just coming to your second question. Look, I think just in the pack, hopefully, we've given you some color in terms of your question on secondary customers. I think, look, going back to the core of our strategy, we said that we would be really focused on winning back secondary customers into Sainsbury's. That's where investing at the center of the plate particularly was really key. Look, on 7 in the pack, hopefully, you can see as we continue to inflate behind the market and even more so on those products that customers buy more often. Too, we're seeing, you know, the results of bringing more secondary customers back into our brand, you know, and particularly compared to our other large superstore competitors. It's a continuation of what we've talked with you about before, but I think as the focus on value picks up. We're seeing, you know, the benefits of this coming through even more clearly, and that's one of the reasons why we've, you know, further, improved the price match to focus now on the 20 highest volume lines that customers buy most often. Okay. Very clear as always. Thank you very much. Thanks, Andrew. Our next question comes from Xavier Le Mené from Bank of America. Good morning, Xavier. Yes. Good morning. Yeah, good morning. Hopefully you can hear me. Yeah. Two questions, if I may. The first one, can you potentially give us a bit of color about the Jubilee and what was the impact of the Jubilee on your food sales? Can you also potentially comment what was the exit rate, you know, for food groceries that grew at the end of the quarters to provide that for the year in the first five weeks as the LFL 11 weeks? Can we get a bit of color for food? The second question actually is about the higher penetration you mentioned about value lines. Can you tell us, you know, where it's coming from? Is it consumers trading from branded goods to value lines or from premium products to value line? Just to get a sense of what could potentially the margin mix impact. Xavier, thank you. Well, look, why don't I pick up your opening questions on Jubilee and kind of the momentum in the food business, and maybe I'll hand to Kevin O'Byrne in terms of some of the mix effects we're seeing. Look, I mean, first point, just to come back to the Jubilee. Look, we really set ourselves up to make sure we could do a great job for customers. You know, Sainsbury's over a long period of time has been strong at key events. I would say we really pushed ourselves in terms of our activation to see what we could do, and it really worked. Look, as you've heard me say, we beat the market substantially that week, and it made around 0.5% difference in the quarter in terms of overall impact of Jubilee. I think really delivering for customers on quality, on innovation, on trade up, and making sure that we really were the go-to destination. Honestly, you know, we also learned a lot from that as we look ahead over the balance of the year at what we think we can do better as we look at the events to come. Pleased with the performance. We learned a lot and we really, you know, went to market with a very coordinated plan and activation to make sure that we really lived for the customers. In terms of more broadly in the food business against our strategy, look, kinda two key points I would point out. First, on value, you know, to your question, we are seeing the benefit of the Sainsbury's Quality Aldi Price Match program and Price Lock because it is really asserting our commitment to maintain and hold the strength of our relative value position. We're inflating behind the market 1%-2%. You've seen where the market's inflating. You know, Kantar last week talked around 7%. We're 1%-2% behind that. Clearly, customers are also making choices about what they're buying into. You can see in our pack, where we've just tried to give you some sense on the price match in categories like meat, fish and poultry and dairy, and also in produce, that we're seeing, you know, higher participation of the Economy own label as we put more of those products into the offer. Both, you know, delivering for customers, but also creating the volume in that meat, fish and poultry aisle and in produce, which is winning those secondary customers, and they're shopping then across the rest of the store with us. A continuation of what we said we would do, and as the focus on value for money becomes even stronger, exactly as we guided to, we're executing against that plan. Kevin, is there anything on the mix you wanna add? Xavier, I'd just draw your attention to slide six in the pack, where you can see the change in mix there, where we've got Aldi Price Match offered to customers. The category that's got the highest penetration is produce, almost 16%, but you can see a big move on meat, fish, poultry, where it's gone from just under 8% to almost 13%. If you were to walk a store this morning with us, you'd see that it. You know, it's very evident in the aisles. It's very clearly communicated. I think we've improved our communication of it as well in store. Strong offers there. A point from an economics of the business, I guess, that's worth remembering as well is, although we're seeing much higher penetrations there, and we're supporting customers at a tough time, the mix in our business, it's still a lower percent of our mix, than you might find in other businesses, which obviously helps the economics in the business. From a customer point of view, you know, if you look at the inflation that Kantar talks about in the market of 7%, let's call it like-for-like inflation, ours is lower for the reasons Simon has talked about. Actually from a customer point of view, in the basket, it's lower still because people are shopping the value that we're offering and able to dial some of that out of their basket. Okay. Thank you. Thank you, Xavier. Our next question comes from Victoria Petrova, Credit Suisse. Hello, Victoria. Good morning. Thank you very much for taking my question. Good morning. Good morning. Thank you very much. Congratulations on strong results. Some of my questions were answered, but it is basically one question around margins. You're keeping your guidance despite the fact that you are very satisfied with first quarter. Obviously, the comps probably would be easier for what you need to deliver in the remaining nine months of the financial year. How do you look at it? Have I understood you correctly that your shelf inflation is 1%-2% and your cost inflation is below 7%, let's say 5%, broadly? Is this the way to look at it? Has this sort of relative outperformance on the revenue side translated into underlying profit before tax? Are there some things we should just keep in mind up till the end of the year, given that there might be challenges which are yet to come, maybe another round of price increases by your suppliers or anything else we should just watch? Could you please help us with that? Thank you. Do you want to talk about some of the outlook and then maybe build on that? Yeah. Victoria, coming on to the guidance range, we're not changing the guidance range. It's you know, it's as we've said before, it's hard to be precise at this stage or more precise at this stage. We're still within that range 'cause there's a lot of moving parts, and clearly the second half is very important for the food business and for general merchandise. As we said before, continue to expect food volumes down a bit with some offset by inflation. Expect high single digits volume declines in general merchandise and of course, all to play for in general merchandise in the second half and hence, you know, the outlook and the guidance remains the same. Look, I've nothing much to add other than to say, look, I think that we're learning a lot as we go, Victoria, as well about clearly where the challenges are, but also where the opportunities are, too. That one of the things I think that's critical as we head into this year is all of the learning about agility and pace through the pandemic is gonna be just as critical as we look out over the next 9-12 months. As you sit in the first quarter, you know, we're staying very close to customers and we're adapting and adjusting our plan based on what we're learning. Of course, everything we've taken for this period, we're using to think about the summer and the autumn and peak and making sure we're really well set, given the conditions around us. Thank you very much. Any comments on the price versus cost increases? Yeah. I mean, I think just maybe to reiterate the kind of key points. Look, you've seen Kantar report around 7% inflation in the market. You know, we said at our prelims in April, and we're consistent with this again now, that we're inflating at the overall level, 1%-2% behind that. Clearly, you know, in products that, for example, are in our price match, you know, we're inflating even less so there. On the other side of things, we're working very hard with our suppliers. You know, the commercial teams, Rhian and Paula and all their team are working really hard on making sure that we're mitigating, you know, the flow of cost price impacts. Of course, you know, the issues around commodities continue, exacerbated by the Ukraine situation, labor costs, fuel, fertilizer. We're all well aware of those impacts. I think, look, we over a considerable period of time now have been, you know, really focused with suppliers on, one, creating volume and two, making sure that we're getting the most competitive terms in terms of what we're buying, and we continue with that work. You know, our job is to pass on the best value we can to customers and make sure, clearly, we protect our shareholders, too. That's exactly what we're doing. We're spending a lot of time in the supply base, you know, really progressing those conversations. It's all about deep, trusted relationships, robust conversations, you know, and finding the opportunities in the challenges. Thank you very much. Thank you, Victoria. Thank you, Victoria. Our next question comes from Andrew Porteous, HSBC. Hello, Andrew. Good morning. Morning, Andrew. Morning, team. How are you doing? Yeah. A couple from me. I guess one of the main features of the market at the moment, certainly from a big four perspective, has been sort of Tesco's consistent outperformance for a period. What do you think it is that's enabling them to sort of win share, even as we sort of lap that lockdown comp? Is there anything in your plans that sort of might narrow that gap? I know you're doing better than some of the others, but just with respect to Tesco in particular. A second question really around Argos. How are we thinking about inventories and gross margins there? Are we starting to see more markdown come into the mix there? Andrew, thank you. Well, let me take your first question and then maybe Kevin could talk about Argos. Mm-hmm. Yeah. Yeah. Look, I think, look, in terms of our plan we laid out in November 2020, you heard us be really clear on food first, and you saw our level of outperformance during the first year of our plan. Look, I think we are pleased with how we performed last year, and we're pleased with how we've performed as we've lapped that period of strong performance. You know, particularly given, as I say, how far ahead we were in the first half of last year. As we look ahead, you know, we're entering into a period of time where some of the supply chain and availability challenges were pretty prominent this time last year. You know, we had CO2, we had issues with meat availability and labor in the meat industry. We had, obviously, the impact of the staycation. All of those things play through during July, August, and September as we look out. You know, we're setting ourselves up to make sure we can continue the strong volume share performance that we are now really working on building, and that's how we see the performance. Clearly, as we put food first and get value right and improve innovation, we've more reasons to feel confident we can sustain that progress. On Argos, Kevin? Yeah. Andrew, on Argos, as you recall, I mean, there were four key things we wanted to do with Argos. You know, take costs out, closing stores and removing rent and rates. Margin discipline was an important one which you're touching on. There was availability, and then there's improving the offer. On margin discipline, we stayed focused on that. You know, it's about profit, not sales for sales sake. We'll continue to do that against the current backdrop. As far as stock is concerned, you know, we're pleased we've got better supply now. As you recall, we've had some supply challenges through the pandemic. I think also our financial strength means the suppliers are very comfortable, obviously trading with us, which is helpful. Thank you, Andrew. Thanks a lot. That's super helpful. Just on the Argos point, do you think more broadly in the U.K. sort of non-food industry, there's the same sort of inventory issues that you're seeing in the U.S., or do you just think that's not been the same sort of issue in the U.K.? I don't think we can comment on everyone else's. I mean, we're very comfortable with our inventory position. Again, look, I think, I mean, the only other point for our business, Andrew, is that, you know, as we've referred with you before, the pandemic was a period of, you know, really significant learning in terms of how we manage both margin cost reduction and inventory levels. Everything that we learned through that period, the team are, you know, continuing to use. Clearly we're focused now on Q3, you know, levels of stock we wanna buy for that period and making sure that we're really agile and well planned in how we do that. You know, a lot of muscle memory being built that we'll be deploying over the next 12 months. Thank you. Thanks, Andrew. Our next question comes from Sreedhar Mahamkali, UBS. Hello, Sreedhar. Morning, Sreedhar. Good morning, guys. Thanks for taking my question. A couple of them. Firstly, can I just follow up on the secondary customers, please? Helpful data on the slide seven there. Can you talk a little bit about the drivers and how important is Sainsbury's quality of the prices here? And also sort of bigger picture, how has the proportion of shopping with Sainsbury's has changed over the past year or 18 months? That would be helpful. Secondly, inflation. We've talked about food and grocery. Can you give us a sense of where inflation is running at across GM and/or in Argos? Thank you. Thanks, Sreedhar. Well, why don't I take your questions on secondary customers, and then maybe Kevin will talk about what we're seeing in terms of inflation levels in GM. Look, I'm just gonna go back as a reference point to November 2020. You'll remember when we laid out our food first strategy that we were really clear, having analyzed and listened to thousands, if not millions of customers, that we had to really work on this secondary customer base that were choosing to go elsewhere for some of the items at the center of the plate, and then were coming back to us to top up. Really what we've been doing over the last close to two years now is focusing in meat, fish and poultry and produce and dairy, winning the heart of the basket, winning the center of the plate. As we've done that, we've seen more secondary customers come back to us. It's really a continuation of what we laid out back in November 2020. I think what's changing is as customers are more and more focused on value, they are looking, you know, every penny on the shelf in terms of where we are compared to others, particularly on those products that they buy most often. You know, it's one of the reasons why we don't run multi-buys, why we don't do, you know, three for twos and extended promotions. Because what customers are interested in, especially now when they're managing every penny and pound in the spend, is what the shelf edge price is on, you know, four-pack chicken breast portions, strawberries, milk, potatoes, you know, the products that we all buy week in, week out. That's what the secondary customer focus is all about. As you, as you've drawn attention to this slide in the chart, what you can see is how we're growing with those secondary customers compared to our direct competitors. The reason we're very focused on that is particularly now where customers are looking at where they can get best value, we wanna make sure that we're putting our best foot forward in continuing to give customers confidence that on those products we're exactly the value they would expect. On Argos? On Sreedhar, on general merchandise, it clearly varies by category 'cause there's a number of businesses in there as you're aware. It's high single-digit inflation we're seeing generally across the mix. That's a combination of the underlying cost of the products coming through, but also the freight to get it into the U.K. We're starting to see freight rates soften as we look out, but clearly the products that are in the country right now, we've had high freight rates. We're seeing a rational market. We're seeing the market passing on those costs through pricing, which is what we would've expected. Thank you, Sreedhar. Thanks, Sreedhar. Our next question comes from Rob Joyce, Goldman Sachs. Hello, Rob. Good morning. Morning, Rob. Good morning. Good morning. Thanks very much for taking the questions. I might actually try and sneak three in. First one, on inflation. I think your own chart there, and definitely, shows quite a pickup in inflation in June. Our own data suggests market's tracking now at double-digit levels. I guess, could you confirm that the sort of exit rate inflation is maybe tracking around those levels in the market data you track? And has those consumer behavior changes, have they started to accelerate towards the end of the quarter or have they been pretty consistent across the quarter? Second one, tied to this is just on the Argos credit book. Can you just give us an update on how the sort of bad debt profile in that book is evolving and anything else you'd highlight in the book's performance? Thirdly, just because I think people are spending quite a lot on holidays at the moment, from your own data, can you give us an idea as to how much your sort of travel money business is tracking, versus, say, pre-pandemic levels? I think that might be interesting. Thank you very much. Rob, thank you. Well, why don't I take one and maybe three, and Kevin, maybe we'll take the credit book question. At risk of repeating myself, Rob, I think look, in terms of what we're seeing on inflation, undoubtedly, as you've described, the situation has developed through the quarter. You know, customers having a propensity to shop more into the economy own-brand product base, we've seen that accelerate. As I said in the presentation, we've also seen customers trading up, particularly on the key events, and that's where Taste the Difference plays a key role. I think just to reiterate the point that while, you know, in terms of the market reads, you know, we've broadly subscribed to the Kantar numbers last week of market inflation. We're 1%-2% behind that, and as I say, depending on how customers shop the basket, you know, if we were to go through a store today and buy only products in the price match, then clearly there's a further level of saving and therefore less inflation in the mix. I think the key trends we're seeing is customers are buying in more into that economy owned label. We think the price match is really well set to prepare for that. As we look ahead, you know, I think what you can see us doing is continuing to adjust our price programs to make sure we're really well set to what customers expect and also, you know, continue to accentuate the breadth and assortment of the Sainsbury's offer. In terms of what we're seeing on price, prices going up, you know, clearly there are some categories where there are more pressures. You'll be well aware of fuel, fertilizer, labor, some of the commodity issues that are out there. What we're trying to do is, you know, position ourselves to be the most competitive on what product customers buy most often, and that's broadly playing through into how customers are buying into those product ranges. Just, the other question you asked before I hand to Kevin, you know, we've had a strong run on travel money, not surprisingly. Interestingly, from our credit card, we can clearly see, you know, that customer behaviors in terms of flights, eating out, travel, you know, is at an elevated level. No surprise there. We are planning and thinking about at what point out-of-home food consumption will move back more in-home and how we make sure in the food business we're ready for that. Strong performance in travel money to start the year. Kevin. Rob, on the Argos credit book- Oh, sorry. After you, Rob. Sorry, Kevin. Okay. No, just on the Argos credit book, no change to date, but it is something we're watching carefully, which won't surprise you. We would expect some weakness as we go through the year. A key thing when we look back historically, a key factor in the strength of the Argos credit book relates to the employment market. In a full employment market that we're seeing at the moment, then you know, we're less concerned, but obviously something we're keeping an eye on. Okay. I think you can. Thanks, Rob. I know that maybe you don't have the stats, but Yeah, just on the 2019, is it. I mean, I get the feeling that people are spending even more than they were in 2019 on travel and restaurants and stuff. I don't know if you can pull that out of your data. I mean, that's the trend we're seeing. I think, look, you know, as you point to, certainly on travel and eating out, the trends. We're not seeing any slowdown in that at the moment. Look, we'll keep you updated as that picture changes. At the moment, continued elevated levels against 2019-2020. Thank you very much. Thanks, Rob. Thanks, Rob. Our next question comes from Will Woods, Bernstein. Hello, Will. Morning, Will. Hi there. Morning. Thanks for taking questions. Just a couple. On the pricing chart that you've shared, it looks like the gap between you and the total market has kind of narrowed over kind of May and June. Do you think that's driven by greater pressure from peers bringing down inflation and holding it back? Or do you think you've just accelerated some of the inflation pass-through? Secondly, just a bit of a technical one. On Argos, you mentioned kind of furniture, home and technology suffering a little bit. Roughly what percentage of sales do they make up within Argos today? Thanks. Thanks, Will. I think I'm gonna look on the first question, you know, and just to absolutely try to be as clear as we can on this. You know, there's clearly a significant inflation coming through in the market. We're inflating behind others and, you know, we have consistently put prices up behind others. But clearly, as you'd expect also, you know, we wanna make sure we manage our choices about value investment and margin to make sure that, you know, we're handling that appropriately. And that's what's happening through this period effectively. As the intensity has picked up, we pass through more prices where the market has moved. In terms of our relativity to others, I think there's an important dimension to this, which as I said earlier, is linked to, you know, the proportion of promotions that different retailers have in their mix. You know, we have a very low promotional mix within our offer compared to a number of our direct competitors, and that directly has a bearing clearly on, you know, the impact of those promotions in terms of what it means on inflation if customers were to buy into all those promotions. Our own view is that when customers are, you know, really watching their budgets and their spend carefully, we're not seeing their propensity to want to buy into three for twos and multi-buys. They're buying what they need now, and hence the reason why our real focus on shelf-edge pricing is working for us and we think really important. I hope that answers your question on inflation. Should I pick up furniture? Kevin? Yeah. Yeah, just on the furniture, it's just over 20%, Will. Got you. Perfect. Thank you. Thank you, Will. Just a reminder, if you would like to ask a question, please use the Reactions button at the bottom of your screen, and I'll ask you to ask your question. Our next question comes from Nick Coulter, Citi. Good morning, Nick. Hi. Good morning. Three quick ones if I may, please. Firstly, to follow up on, I think, Andrew's question on Argos. I know you said you're happy with your inventory, but to what extent are you kind of pre-ordering or pre-shipping general merchandise inventory, or is that completely normalized? Then kind of a follow-up to that, how are you thinking about adapting your offer at Argos into the kind of peak as the consumer weakens? Nick, thank you. I can hear a fire alarm going off there. Okay. I think you said three questions. I've got two there. The situation on stock on GM, adapting the offer, as we head into peak. Was there a third question that you wanted to ask? There was, but we're having a bit of a fire alarm test here. No problem. Why don't you answer the first two and I'll- I'll answer the first two. That's okay. No problem. Okay, let me do that. Look, as I've begun to describe, you know, the team are all over-planning the peak period. I think, look, for all the obvious reasons, we are, you know, being very thoughtful about the stock commitments we're buying, too, but also, you know, we see a number of opportunities in this market as well. Argos, you know, has a really strong reputation with customers for good value for money. Clearly, our digital reach is significant. You know, clearly, as we now have over 400 store-in-stores inside Sainsbury's supermarkets, over 1,000 collection points, there's a number of elements of the Argos customer proposition that we think will be, you know, really important through this period of time. We are planning and preparing for peak in that context. You know, availability is a key focus of what we're working on. You can see in our pack how availability has improved over the last nine months. Of course, it's a careful balance between optimizing availability and the products people wanna buy. And making sure that we are robust and disciplined in our stock commitments. You know, I think, you know, this period of time we'll continue to do exactly what we've been doing. Then on the offer, look, I think, we started on Argos in November 2020 and said we needed to face into the operating model and operating cost of the business. We are coming up two years on that progress. As you've seen, we've accelerated substantially the store-in-stores and the rollout of the local fulfillment centers. We expect that to continue to drive both availability and the continued reduction in operating costs. We're also making, you know, a number of efficiencies in our logistics operations as well. The cost-based transformation was our first key priority. You know, we're clearly also looking at the proposition, looking at our value, looking at our assortment, looking at our availability. Paula and the team are very focused on that. You know, we've got, you know, a number of key plans that we're now working on. You know, brands that deliver is a key focus of our strategy and the combination of cost takeout, margin discipline, and improving the offer are all three of those we're moving forward with. Is it fair to say if you're expecting high single digit down volumes, but then you've got high single digit inflation coming through the kind of your inventory will be broadly flat in terms of monetary terms heading into peak from a GM perspective. Is that a sensible assumption to make that you've brought your inventory down for the lower volumes, but clearly on a monetary basis it will be back up? Yeah, I think there's a couple of things we shouldn't miss in the history. Clearly, we were under-optimized on availability into last Christmas. You know, there were you know, a number of categories where we would've preferred to have had more stock in the system than we were able to get due to the global situation. You know, clearly we're planning for both the impact of the demand down this year versus the availability shortfalls last year. You know, and also we're working closely with suppliers to make sure that we get more than our fair share of products where we think we've got a real opportunity to convert with customers. It's not as straightforward as to compare the two years year on year for that reason. I guess the key point I would come back to is, you know, we see opportunities in this market to make sure we deliver for customers. We're equally being robust on where we're investing in stock and where we're not. Great. Okay. Thanks very much. One last one, if I may, just on inflation. As we stand here today, where do you expect grocery inflation to peak and when? That's very much obviously on a best guess today basis. Yeah. Nick, look, you wouldn't, I don't think, expect me to be able to name a number. It's an uncertain situation. Clearly, the pressures are still in the system. Look, you can see as I can, you know, the continued pressures on some of the inputs still coming through. I would say that we're very close to this with our suppliers, as you'd imagine. You know, day in, day out, week in, week out, we're constantly talking with our key suppliers, which gives us a good line of sight to where the inflation tracks are going. You know, some of the availability issues we've seen are starting to recover, particularly on some of the Ukraine based issues. Look, I think what I would say on this is we're all over making sure we mitigate the impact, all over making sure we manage the mix impact such that we can deliver good value for customers, but also, you know, make sure we deliver for our shareholders too. As we look out for that, we're gonna navigate those choices carefully as we've been doing. Your sense is that it still rises from here. There's no kind of plateau or subsiding. Look, I think there's still pressure in the system, but as you look further out, I think it's, you know, it's hard to call what's gonna happen further into the autumn. There's still more to come, but I think we've got good line of sight of what we can see with our suppliers, and we continue to use that to inform, you know, the balance of what we're investing in price and as I say, how we manage the impacts of this. What we've done so far, you know, I think demonstrates the rigor with which we're doing that. Super. Thank you. Thank you. Nick, I hope everything's okay there now on the fire alarm front. Thank you. That was our final question. I will now hand back to Simon Roberts for closing remarks. Thank you. Okay. Well, look, thanks everyone for joining us this morning. We really appreciate your time, and I hope we've been able to give you some good color on our performance. Clearly we'll focus now as we head into the second quarter. Thank you for your time and look forward to catching up again soon. Thank you.