Sainsbury's
Sainsbury's said the market will remain competitive this year.iStock

Sainsbury's revealed that its total retail sales grew in the fourth quarter of its financial year and that it maintained its market share in the period, although it warned conditions will remain competitive as food deflation continues to impact sales growth.

In the nine weeks to 12 March 2016, the FTSE 100 retailer posted a 1.2% year-on-year increase in sales excluding fuel, the first quarterly sales growth in more than two years. When factoring in fuel, sales increased 0.5% from the corresponding period in 2015.

On a like-for-like basis and excluding fuel, sales grew 0.1% year-on-year in the period, while they declined 0.4% when considering fuel sales.

"We have delivered a strong performance this quarter," said group chief executive Mike Coupe. "Our supermarkets recorded both like-for-like transaction and volume growth and we continue to exceed our internal metrics for service and availability."

Sainsbury's added the growth in sales was down to a strong performance in groceries online sales, which grew nearly 14% as orders increased by nearly 19% from the corresponding period in 2015. The clothing and entertainment division registered gains of 10% and 11% respectively, while Sainsbury's Bank continued its good performance with 15% volume growth in insurance new business and 12% growth in travel money in-store transaction volumes.

Coupe said the group's expansion plans were on track after the company opened 16 new convenience stores and a new supermarket in the period, but warned the competition will remain high.

"We have traded well this year and are making excellent progress implementing our strategy," he added. "The market will remain competitive but we are confident that we will continue to outperform our major peers."