Clothes star in Sainsbury result

The UK's third-biggest grocery chain saw like-for-like sales growth, excluding fuel, in the 11 weeks to March 20, drop from 3.7 per cent the previous quarter as it came up against tough comparatives from a year earlier.

Full-year same store sales rose 4.3 per cent, but the group warned the consumer spending environment would remain challenging over the year ahead.

Sainsbury's has reported slowing sales growth since the first quarter of 2009, as easing food price inflation and cautious consumer spending has compounded the challenge of reporting against strong comparatives.

It grew sales by 6.2 per cent a year ago. But analysts had expected the fourth quarter to be tougher for Sainsbury's and for the entire supermarket sector, hit by adverse weather in January and a clampdown on spending after Christmas.

Justin King, chief executive of Sainsbury's, said: "While we expect the consumer environment to remain challenging in 2010, our universal customer appeal together with our accelerated growth of space for new supermarkets, extensions and convenience stores means we are well placed to make continued good progress in the new financial year."

Sales in the group's online offering rose 15 per cent, while it confirmed further growth for its non-food ranges – at three times the rate of food, it said.

Childrenswear has become a "rising star" after a good January sale for its non-food products.

The group said it was on track with plans to expand store space by 15 per cent by March 2011, which is creating 13,000 extra jobs.