J Sainsbury, Britain's No. 3 supermarket, met forecasts for underlying sales in the Christmas quarter, though growth did slow from its first half in a highly competitive festive market.
The group, which trails market leader Tesco and No. 2 player Wal-Mart's Asda by annual revenue, said on Wednesday it was positioned to perform well over the next quarter even though it expected a tough economic backdrop to persist with shoppers looking to re-balance budgets after Christmas.
Sainsbury's said sales at stores open over a year rose 0.9%, excluding fuel, in the 14 weeks to Jan. 5, its fiscal third-quarter.
That was bang in line with analysts' average forecast, according to a company poll, included a record breaking Christmas and was a 32nd consecutive quarter of underlying sales growth. However, the outcome was down from growth of 1.9% in the previous quarter.
Total third quarter sales rose 3.3%, excluding fuel.
In November Sainsbury's had guided to second-half like-for-like sales growth similar to the 1.7% made in the first half.
Many of Britain's grocers are finding the going tough, despite their focus on essential goods, as consumers fret over job security and a squeeze on real incomes.
With the retail market showing minimal growth, store groups are battling to steal market share off each other.
Industry data on Tuesday showed Sainsbury's posted the highest sales growth of Britain's so called "big four" grocers in the run-up to Christmas and was the only one to eke out any market share growth.
Sainsbury's has been helped by the development of its online and convenience stores business, the two fastest growing grocery channels in the UK.
It has also benefited from the success of its "Brand Match" pricing initiative, higher take up of own-label food ranges, increased sales of non-food products and a boost to its profile from its sponsorship of the London Paralympic Games.
No. 4 chain Wm Morrison on Monday posted a 2.5% fall in like-for-like sales, excluding fuel and VAT sales tax, for the six weeks to Dec. 30 while Tesco is tipped to report on Thursday underlying growth of 0.5-1.5% in its home market for the six weeks to Jan. 5, partly reflecting easier comparatives with a dismal Christmas performance last year.
Asda is not due to report until February.
Shares in Sainsbury's, up 13.5% over the last year, closed Tuesday at 339 pence, valuing the business at 6.4 billion pounds ($10.3 billion).
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