The UK's third largest supermarket group Sainsbury's today (11 January) reported a 5% increase in its third quarter sales, excluding fuel, driven by strong seasonal demand for its premium and organic ranges.

Sainsbury's revealed that sales of its premium own-label Taste the Difference range grew by 20% over the Christmas period. The chain also said that it sold double the number of organic British turkeys as last year. Online sales in the week before Christmas rose by 60%, the company added.

Sainsbury said its third-quarter underlying sales, which strips out trading adjustments for the period, rose 4.2%. No earnings figures for the quarter were released.

Research firm TNS WorldPanel said that Sainsbury's increased its market share to 16.4% in the 12 weeks to 31 December, putting it within 0.2% of nearest-rival Asda, which currently occupies the number two spot in the UK food retail sector behind Tesco.

The results, Sainsbury's eighth consecutive quarter of like-for-like sales growth, further disprove fears that food retailers faced poor Christmas sales across the board. Morrisons reported expectation-beating sales yesterday, while Asda has said strong online and organic sales produced better-than-expected results. Tesco is set to report its trading figures next week.

Chief executive Justin King predicted that the coming months would be competitive as supermarkets reduced prices. Sainsbury's has already slashed the price of 1,000 products and launched 200 half-price offers, at a cost of GBP70m.

"Traditionally the next few months are particularly price competitive as customers tighten their belts, and we expect this year to be no different," King said.

Speaking on a conference call, King said that the food retail group was comfortable with market expectations for FY underlying profit of GBP360m (US$696.3m).  

"We are pleased with our progress over Christmas and the results achieved give us good momentum to deliver sales growth as we enter the fourth quarter," King said in a statement.