Sainsbury's profit set to dip as price war looms

Sainsbury's has forecast that shop profits will flatline or fall in the coming year as the supermarket sector gears up for a price war.

The retailer said it expects income to dip to £1bn as it continues to invest in lowering grocery prices.

Last week, Tesco admitted that it could take a significant hit if it is forced to cut prices after Asda - now under the leadership of industry veteran Allen Leighton - announced it would reduce grocery costs to boost the struggling store.

A race to lower prices could help households who are still struggling with the cost of living at a time when bills, such as energy and water, are increasing.