Sainsbury's share of the UK grocery market is at its biggest portion for a decade Reuters

J Sainsbury shrugged off the difficult UK grocery market to produce another solid set of financial results.

British consumers have suffered a squeeze on their finances amid weak wage growth and a rising cost of living, dampening demand in the retail sector.

Though profit growth was at its slowest rate in a decade, Sainsbury's said underlying profit before tax lifted 5.3% to £798m ($1.35bn, €973m) for the year to 15 March, 2014. Underlying group sales were up 2.8% to £26.3bn, though like-for-likes were only 0.2% higher.

"While the general economic outlook is showing some signs of improvement, conditions in the food retail sector are likely to remain challenging for the foreseeable future as customers continue to spend cautiously," said Justin King, chief executive of Sainsbury's.

"We remain committed to investing for the future and continue to see significant opportunities for growth."

Sainsbury's share of the UK grocery market is 16.8%, its biggest portion for a decade. Its rivals have been locked in a bitter price war as they discount heavily to attract in hard-pressed consumers.

But Sainsbury's has shunned the war in favour of bolstering its high-quality own brands under the firm's "Live Well for Less" campaign, with a focus on better value products rather than making them the cheapest.

"While we believe progress in this area can provide Sainsbury's with a more sustainable competitive advantage over time, it will undoubtedly face a more difficult trading period amid a stronger focus on price among its peers," said George Scott, senior consultant at retail analyst Conlumino.

Sainsbury's chief executive King is set to leave the supermarket in 2014 after serving a decade at the firm. He will be replaced by Mike Coupe, who is currently group commercial director.