The firm, which revealed that it had a November bid approach for Argos owner Home Retail rejected, said sales at stores open over a year fell 0.4%, excluding fuel, in the 15 weeks to January 9, its fiscal third quarter.
That was better than analysts’ forecasts.
Sainsbury’s has shown greater resilience to competition from discounters Aldi and Lidl than its big four rivals but has still endured eight quarters of declining underlying sales, hurt by industry deflation.
The firm, whose total sales rose 0.8%, excluding fuel over the third quarter, said it had benefited from an increase in the number of transactions its customers were making, and the volume of products bought.
“We have traded well during the festive period in a highly competitive market,” said chief executive Mike Coupe.
The supermarket made no mention of its approach for Home Retail in its statement. Under British takeover rules it has until February 2 to make a firm offer for Home Retail or walk away.
Sainsbury’s now expects its like-for-like sales in the second half of its 2015-16 year to be better than the first.