Sainsbury's outperforms rivals with solid growth

Sainsbury's today bucked the retail gloom to show a pick up in quarterly sales growth in stark contrast to bigger rival Tesco.

Sainsbury's said its like-for-like sales were rose 1.9% - faster than the 1% growth reported in the previous quarter. That beat Tesco's 1% growth on a comparable basis.

Analysts said Sainsbury may have found it easier to pass on price rises to shoppers due to its slightly more affluent, albeit far smaller, customer base.

Sainsbury said it had been boosted by a warm April and the royal wedding as well as its expansion into non-food markets, the Internet and convenience stores.

However, chief executive Justin King warned that the market environment remained very competitive reflecting the challenging economic backdrop, and expects this to be the case throughout the year.

The figures came in slightly behind City forecasts of a 2.1% rise.

Sainsbury's chief financial officer John Rodgers said he would be "interested" in bidding for a handful of Iceland's stores if they came up for sale. Iceland's 67% shareholder Landsbanki is putting its stake up for sale, triggering speculation of a possible breakup.