J Sainsbury delivered a confident set of results today, claiming to be blooming despite the credit crunch and taking custom from rivals such as Waitrose and Marks & Spencer.

In the six months to 4 October the supermarkets chain pushed profits up 13.3% to £272 million, the top end of City predictions. The City has been perpetually sceptical about Sainsbury's turnaround under chief executive Justin King, always expecting that it was about to run into trouble. But King had a gentle swipe at the analysts today.

"People have not properly understood the changes we have made," he said. "Had we been the same business we were five years ago, they might have been right, but we're not."

Sainsbury's has slashed prices and expanded its range of own-brand goods as shoppers look for ways to cut food bills. It claims to have a near-universal appeal with a "good, better, best" product offering that aims to fend off the challenge from discounters Aldi and Lidl. King said: "Customers have stepped on again in terms of looking for value for money. The key for us is that we offer anything people want. The top end of the market don't give people those choices."

Figures from retail analyst TNS show the market share of Tesco, Waitrose and Morrisons has slipped from a year ago, with Sainsbury's steady at 16%. Tellingly, it has not been forced, unlike M&S, to take an axe to its capital expenditure programme. It still expects to spend £900 million a year on expanding and improving its stores.

The TNS figures show that Netto, Lidl and Aldi have a combined 6.1% market share. With large companies slashing thousands of jobs as the economy tightens, King had reassuring words for his own staff, saying he had no plans to make lay-offs.

"Quite the reverse, we expect to take on 12,000 Christmas temps. We are creating jobs," he said.Like-for-like food sales rose 3.9% while overall sales were up 7.6% to £10.7 billion. The interim dividend is 3.6p.

Sainsbury's shares are well down on the 580p they touched a year ago when a takeover of the company seemed likely. A private-equity consortium and later the Qatari royal family seemed close to securing a deal, but failed to reach agreement with the board.

David Sainsbury - Lord Sainsbury of Turville - made it plain he would not sell his 7.75% stake for under 600p a share. Today the shares moved up 5¾p to 278p.

The results throw down the gauntlet to arch-rival Tesco, which unveils its third-quarter figures in December. Reports today indicate Tesco is putting the brakes on its US venture Fresh & Easy because of the recession. It now plans to have 200 stores by February 2010, rather than the earlier target of November next year.