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Sainsbury’s has warned that the conflict in the Middle East will “impact both our customers and our business”, potentially leading to a fall in profits.

The UK’s second largest grocery chain echoed the cautious message delivered last week by its largest rival, Tesco.

Simon Roberts, Sainsbury’s chief executive, observed that shoppers have become “even more focused on the cost of living” since the conflict started at the end of February.

He stressed that the retailer is committed to ensuring customers receive “the best possible value”.

While an impact from the conflict is expected, the company said that its duration and extent remain “very uncertain.”

It said it expects to deliver underlying operating profits of between £975 million and £1.075 billion for the current financial year.

This came as Sainsbury’s told shareholders that it reported a £1.025 billion underlying operating profit for the year to February 28, down 1.1 per cent on the previous year.

Meanwhile, pre-tax profits jumped by 55.3 per cent to £393 million for the year.

The retailer also revealed that group revenues, excluding VAT, rose by 2.7 per cent to £33.6 billion for the year.

Retail sales, excluding fuel, were up 4.3 per cent for the year, boosted by a 5.2 per cent rise in grocery sales on the back of strong volume growth.

It also reported that sales in its Argos business grew by 0.7 per cent to £4.1 billion for the year.

Mr Roberts said: “More and more customers are choosing Sainsbury’s for more of their shopping, trusting us to deliver great value day in, day out.

“The conflict in the Middle East means customers are even more focused on the cost of living and we are absolutely committed to making sure everyone gets the best possible value when they shop with us.”