Sales growth slows at Sainsbury's

Sainsbury's serves 18 million customers a week

Sales growth has slowed at supermarket chain Sainsbury's in the past three months as the firm experienced a "challenging economic environment".

Like-for-like sales excluding fuel were up 3.4% in the 12 weeks to 14 June, compared with a 4.1% increase in the previous three months.

The retailer said it was seeing strong sales growth in its expanded, lower-cost basics range.

Sainsbury's online sales operation continued to grow, with sales up 40%.

Including fuel, like-for-like sales were up 7.3% because of the rising price of petrol and diesel.

"Whilst we anticipate that the environment will remain challenging, we operate from a strong financial position," said chief executive Justin King.

Last month, Sainsbury's reported a 28% rise in underlying profits to £488m for the 2007 financial year.