Sainsbury's has warned the ongoing Middle East conflict will impact both shoppers and its operations, unless Chancellor Rachel Reeves intervenes.
The supermarket also said it expects underlying operating profits to come in between £975million and £1.075billion for the current financial year, reflecting growing uncertainty over costs.
The outlook follows similar caution from Tesco, which last week highlighted pressures linked to the same geopolitical tensions.
Chief executive Simon Roberts said customers have become "even more focused on the cost of living" since hostilities began at the end of February.
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He said the company expects disruption from the crisis but added that both the duration and scale of the impact remain "very uncertain" at this stage.
Mr Roberts warned there will be upward pressure on food prices as higher energy costs feed through into production and supply chains.
Industry body Food and Drink Federation has said food inflation could rise above nine per cent this year as a result of the crisis.
Mr Roberts urged the Government to extend energy support schemes to food producers and manufacturers, arguing this would help limit further price increases.
Sainsbury’s profit warning as Middle East conflict drives food price pressure and cost concerns
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He said: "The single biggest thing the Government can do is make sure they provide all the support they can to help with the cost of energy".
Mr Roberts highlighted that the UK growing season is underway, with domestic food production requiring significant energy input at a critical time.
"It means there are particular price pressures in fresh food with regards to energy, so it is important for those energy costs to be mitigated".
For the financial year ending February 28, Sainsbury’s reported underlying operating profits of £1.025billion, representing a 1.1 per cent decline compared with the previous year.
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Pre-tax profits rose by 55.3 per cent to £393million over the same period, reflecting improved overall performance despite cost pressures.
Group revenues, excluding VAT, increased by 2.7 per cent to £33.6billion.
Retail performance remained strong, with sales excluding fuel rising by 4.3 per cent across the year.
Grocery sales led the growth, increasing by 5.2 per cent driven by higher volumes.
The retailer’s Argos division reported a 0.7 per cent increase in sales to £4.1billion.
Mr Roberts said more customers are choosing Sainsbury’s for a larger share of their overall shopping, reflecting confidence in its pricing and range.
Susannah Streeter, chief investment strategist at Wealth Club, said the conflict has created additional uncertainty for the group.
She said: "The war has thrown up clouds of uncertainty for Sainsbury's, as cost pressures threaten to mount and shoppers become more cautious".
Sainsbury’s shares fell in early trading following the updated profit guidance, placing the stock among the biggest fallers on the market.
Ms Streeter said the company’s decision to allocate more space to food products appears consistent with weaker demand for non-essential goods.
Clothing sales had already declined in the second half of the year due to unfavourable weather conditions.
Concerns are also growing that disruption to fertiliser supplies from the Middle East could increase costs further, potentially leading to higher prices for consumers.