Sainsbury’s has reported like-for-like sales in its first quarter excluding petrol up 1.9% in the 12 weeks to June 11, and warned the market remains very competitive reflecting the challenging economic backdrop.

The figure is a pick up from its previous quarter where it showed 1% growth. It is also ahead of Tesco, which yesterday reported a 1% uplift comparatively. Tesco has a bigger exposure to non-food though.

Shore Capital estimates the excluding VAT and petrol like-for-like figure for Sainsbury’s to be up 0.8%.

Sainsbury’s like-for-likes including petrol were up 4.8%. Total sales were up 7.3% or 4.3% excluding petrol. The grocer said weekly transactions were up 5% to 22 million.

Sainsbury’s said despite the tough economic conditions, customers celebrated during Easter, the Royal Wedding and the hot April weather. It said it sold the most champagne it has ever sold outside of Christmas.

However, Sainsbury’s said the increase in petrol costs is placing further pressure on disposable income. It highlighted customers are buying more own brand products, with its three own labels Basics, By Sainsbury’s, and Taste the Difference all reporting volume and sales growth.

Basics is its fastest growing brand, and is now number two in the value market with 22.3% market share. By the end of the quarter it had re-launched over 1,500 products from its By Sainsbury’s range.

In the quarter it also launched its Feed Your Family for £50 meal planner, and it said products in the planner have seen sales and volume uplifts of over 20%.

General merchandise and clothing grew faster than food, despite the tough market. In the quarter it celebrated its biggest kidswear sales week, and also claimed to be the number one retailer for The King’s Speech DVD, with 34% market share.

Its convenience business grew at 20%, and groceries online grew at over 20%.

Sainsbury’s said it expected the environment to remain tough for the rest of the year.

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