Sainsbury offered more evidence today that supermarkets remain one of the bright spots in an otherwise moribund economy.

Like-for-like sales at the UK's third-biggest supermarkets chain rose 4.3% in the last 16 weeks, bang in line with City expectations. It also compares well with the 4% rise reported last week by Tesco, the biggest player.

Chief executive Justin King saw the figures as proof that his turnaround of the stores continues to bear fruit. When he joined four years ago, Sainsbury's was in the mire, having seen its position of trust undermined.

Food remains at the core of its offering — more so than rivals such as Asda and Tesco, which sell more goods from larger stores. King said: “We have to get the food right first.”

Sainsbury's shares, down from a year high of 584p, today fell 19¾p to 295p. Despite the group's steady progress, few City analysts rate them a buy, which could be bad news for property tycoon Robert Tchenguiz. He offloaded his 25% stake in pubs group Mitchells & Butlers yesterday, and there is growing talk that he wants a buyer for his 5% stake in Sainsbury's. He may have to take a loss if he does sell.

Although Sainsbury's is associated with slightly higher prices than Asda or Tesco, King says customers can cut a fifth off their bill by choosing its own-brand products. He recently introduced a Switch and Save marketing campaign to highlight his case.

King denied he was under pressure from Lidl or Aldi, the budget supermarkets that are picking up market share. He claimed that Sainsbury's cut-price goods are already cheaper than Lidl's in any case, and added: “Customers are increasingly turning to own-brand products. We continue to develop our offer to help customers manage tighter budgets without the need to sacrifice food quality.”

Total second-quarter sales, including fuel and new store space, were up 8.4%. Although King's strategy is based heavily on food, the group has nine non-food stores selling homeware and clothing.

Supermarkets tend to do well when the economy struggles, as consumers cut back on nights out and other spending but comfort themselves with good food at home.

King said: “The economic environment remains particularly challenging and we expect this to continue throughout the second half, but we have developed the Sainsbury's offer to perform in these conditions.”

Sainsbury's has more than 800 supermarkets and convenience stores.