Early Christmas shopping helped Sainsbury's sales jump over the latest quarter

It said that growth was buoyed by “inflation and relatively resilient volume trends”.

Sainsbury’s told shareholders that profits for the year are now expected to be towards the “upper end” of its previously announced guidance of between £630m and £690m.

Simon Roberts, chief executive of J Sainsbury, said: “We delivered the best possible Christmas for customers as millions of households managed their budgets differently, hosting larger gatherings again and treating themselves at home.

"Customers shopped early, buying Christmas treats and fizz more than once and looked for deals, taking advantage of Black Friday and other seasonal offers. Argos offered great value and quality and, as train and postal strikes disrupted the country, customers appreciated its

reliability and convenience.

“We prioritised keeping our prices low and giving our customers great value at Christmas. We went bold on the traditional fresh turkey roast dinner with all the trimmings and dessert, which was the best value in the market at under £4 per head. Sales were also boosted by the World Cup as people celebrated more at home.

"Our determined focus on delivering the best value alongside new and exciting festive food plus outstanding customer service and availability

meant we delivered record sales, and market outperformance at both Sainsbury’s and Argos.

“We understand money will be exceptionally tight this year particularly as many people wait for Christmas bills to land.

“We are working together with our suppliers to battle cost inflation and we’re keeping prices low again this year with our biggest value campaign yet in January, price matching Aldi on around 300 of our most popular products.

“Finally, a huge thank you to all my colleagues who really do make the difference for our customers. We announced a market leading pay rise for our front line colleagues last week to £11 per hour (£11.95 in London) and an additional six months of free food in stores and depots. I am hugely grateful to all our team and suppliers for their hard work and support in delivering these results.”

Charlie Huggins, Head of Equities at Wealth Club, commented: "This is a solid performance from Sainsbury's with the group raising its profits and cash guidance for the year, against an intensely competitive market backdrop.

"It seems that UK shoppers indulged in one final sales splurge in the run up to Christmas, benefitting Sainsbury's and its peers. However, with the slowdown in consumer spending yet to really bite, it's likely the environment will get tougher.

Mr Huggins added: “The squeezed middle is never a particularly pleasant place to be, but especially not in an inflationary environment, when cash-strapped shoppers are feeling the pinch. Sainsbury’s lacks the scale and financial muscle of its larger rival, Tesco. And it simply can't compete with the prices of Aldi and Lidl.

“The German discounters enjoyed a stellar Christmas, growing their UK sales by a quarter over the festive period. With grocery prices soaring, their appeal is only likely to increase.”