The company further recorded sales growth at Argos, which got a boost during the key Black Friday and Christmas holidays.
The company, which operates 604 supermarkets and 796 convenience stores across the United Kingdom, reported that like-for-like retail sales rose by 0.1% in the 15-week period to January 7 while total retail sales advanced by 0.8% over the same period, in an update published on Wednesday.
The supermarket group beat forecasts with a 0.1% rise in same-store sales in its third quarter while the same measure at Argos was up 4%.
Supermarket group J Sainsbury plc (LON:SBRY) confounded the pessimists today and posted better than expected Christmas trading but only thanks to a solid contribution from last year's acquisition of Argos-owner Home Retail Group.
The company, which previous year acquired Argos owner Home Retail Group PLC, said same store sales for Argos were up 4.0% in the quarter.
The problem is, that whilst this nod to the group's foresight in moving to diversify and get ahead of increasingly demanding consumer trends in buying Argos, it was also an admission-intended or not-that traditional supermarket sales were a let-down during one of the best Christmas seasons for years.
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Wilson said: "It increasingly looks like Sainsbury's is losing market share, notably to Tesco, as the latter is enjoying a rebound". And clothing and general merchandise also jumped: by 10% and 3%, suggesting an outright sales rebound could be close.
Christian Härtnagel, the new chief executive of Lidl UK, said: "Customers were once again won over by the quality and freshness of our fruit and vegetables".
Sainsbury's saw sales sky rocket over the Christmas period and managed to rake in more than £1bn.
"Our groceries online and convenience channels performed well, achieving over nine and six per cent sales growth respectively and at Argos we saw record levels of online participation".
Over the Black Friday period, 65% of Argos sales were taken online and a quarter of a million Fast Track deliveries made over that weekend. However, a weaker pound could mean that this situation changes over the next two years. "However, we are well placed to navigate the external environment and remain focused on delivering our strategy".
But he adds: "The market remains very competitive and the impact of the devaluation of sterling remains uncertain".