Sainsbury defies the City with yet more sales growth

J Sainsbury unveiled its 14th consecutive quarter of sales growth today, as the supermarkets group continued to shrug off City suggestions it is poised for a fall.

Although the shares have fallen now bid interest has abated, the chain's performance has remained solid.

In the 12 weeks to 14 June, like-for-like sales rose 3.4%, roughly in line with analysts' expectations. Some observers remain convinced that Sainsbury will eventually lose out to Tesco and Wm Morrison.

Deutsche Bank analyst James Collins said: "We remain worried about loss of trading momentum relative to competitors. We are not confident that Sainsbury has either the financial firepower or the brand flexibility to reignite customer growth."

Sales growth is indeed slowing, but only slightly.

Chief executive Justin King said: "All we can do is to keep growing one quarter at a time. This is very different business to four years ago."

King insists food inflation is well below Government figures of 7.8%. "It isn't as bad as people say," he said, adding that customers are still spending heavily on food.

Like-for-like sales including fuel are up 7.3% - a clear sign that petrol prices are soaring.